Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — UNEMPLOYMENT.

GLASGOW.

Mr. J. J. Davidson: asked the Minister of Labour the total number of registered unemployed persons in Glasgow up to the latest available date?

The Minister of Labour (Mr. Ernest Brown): At 16th October, 1939, the total number of unemployed persons on the registers of Employment Exchanges in Glasgow was 67,381.

Mr. Davidson: Can the Minister say whether this total is a considerable decrease on the figures of last year?

Mr. Brown: About 10,000; the figures last year were 77,819.

AIR-RAID PRECAUTIONS WORK.

Mr. Davidson: asked the Minister of Labour whether machinery exists for the purpose of transferring unemployed persons to paid air-raid precautions work; and, if so, how many have been so transferred in Glasgow?

Mr. E. Brown: No specific machinery of this nature has been set up, but the Employment Exchanges make every effort to secure paid employment on air-raid precautions for unemployed persons. With regard to the second part, there are no statistics available as to the number of unemployed persons who have secured paid air-raid precautions work in Glasgow, but I am informed that over 5,000 of the 6,688 paid A.R.P. workers in Glasgow were unemployed before being taken on for A.R.P. work.

Mr. Davidson: Does the Minister contemplate the setting up of machinery in local areas for this particular purpose?

Mr. Brown: I think the figures I have given show that the Employment Exchanges are filling the bill in the usual way.

Mr. Davidson: What about the 67,000?

PROFESSIONAL MEN.

Mr. Rhys Davies: asked the Minister of Labour whether he is aware that many architects, surveyors and kindred professional men in business on their own account who are outside all the social in surance schemes are without work or income, owing to the national emergency; and whether he will make some arrangements whereby they may secure employment in Government service?

Mr. E. Brown: Any vacancies in Government service for architects, surveyors and kindred professional men in business are notified to the Central Register, from which suitable applicants are selected. The number of such vacancies, however, is limited and, as I stated in my reply to the hon. Member for Leyton, West (Mr. Sorensen), on 19th October last, I am considering what further steps can be taken to bring unemployed technical professional workers into touch with other suitable vacancies.

Mr. Davies: Would it be possible for the right hon. Gentleman to establish a pool of these applicants instead of allowing them to apply to each of the three Defence Services?

Mr. Brown: We are at the moment engaged in trying to work out a scheme for a register intermediate to the Central Register for higher qualifications than the ordinary exchange system.

Mr. Sorensen: Can the Minister say when he is likely to be able to announce a decision?

Mr. Brown: As quickly as I can.

EX-TERRITORIAL.

Mr. Robert Gibson: asked the Minister of Labour whether he can now say if employment has been found for Mr. James Mclntyre, Greenock, who, at the request of an official of the Ministry of Labour, was released from the London Scottish on 29th August, 1939, who has since been unemployed, and concerning whom the hon. Member for Greenock


wrote to him on 14th October, 1939, and again on 3rd November, 1939?

Mr. E. Brown: Mr. James Mclntyre has not yet secured employment, but efforts to assist him to do so are continuing. He has been given the opportunity of rejoining the Army, but I understand that he does not wish to do so.

Mr. Gibson: Can the Minister say whether he has been given the right to rejoin the London Scottish, from which men who have no connection with Scotland are being transferred, as the House will remember?

Mr. Brown: If the hon. and learned Gentleman wants information on that I shall be pleased to make inquiry.

ALLOTMENTS (SALE OF PRODUCE).

Mr. Thorne: asked the Minister of Labour whether unemployed men cultivating allotments will be allowed to sell any of the produce of allotments after supplying their household needs; and whether he will see that they are permitted to sell their products if they do not exceed the value of 3s. 4d. per day, or £1 3s. 4d. per week?

Mr. E. Brown: I assume that the hon. Member is referring to unemployment insurance and unemployment allowances. As regards unemployment insurance the statute governing this matter is Section 35 (5) of the Unemployment Insurance Act, 1939. As regards unemployment assistance, the practice is not to make any deduction from allowances in respect of the proceeds of occasional cash sales. If, however, the allotment holder makes a regular income out of his allotment the case would have to be considered in the light of the individual circumstances.

ASSISTANCE.

Mr. George Hall: asked the Minister of Labour whether he can now make a statement on the question of taking part of the allotment made by a man serving in His Majesty's Forces for a dependant into account by the Unemployment Assistance Board in determining the parents' allowance?

Mr. E. Brown: I am informed by the Board that the first 7s. of an allotment

made by a serving soldier to a parent will be ignored in assessing the parent's allowance.

Mr. Hall: Will the right hon. Gentleman consider the question of relieving the allotment altogether irrespective of the amount, as there is no reason why the allotment should be taken into consideration, seeing that it is an allotment out of the man's pay?

Mr. Brown: I will put that point to the Board.

Mr. Charles Brown: May I ask the right hon. Gentleman how he thinks an unemployed man can make a regular income out of an allotment?

Mr. Brown: It is another kind of allotment.

Oral Answers to Questions — COST-OF-LIVING INDEX FIGURE.

Mr. Higgs: asked the Minister of Labour whether he is aware that the complete information on which he was to base the new cost-of-living index figure was collected by July, 1938; and whether he can now make a statement thereon?

Mr. E. Brown: The collection of information for this purpose was not completed until October, 1938, and in many cases correspondence with the households who had supplied information was subsequently found necessary on points of doubt or difficulty, disclosed by a scrutiny of the budgets received. As my hon. Friend will realise, the analysis of the very large amount of information obtained by an investigation of so detailed and comprehensive a character—comprising 50,000 budgets giving complete particulars of weekly expenditure and over 150,000 returns relating to weekly expenditure on clothing—must inevitably occupy a considerable time. Every effort, however, is being made to expedite the progress of the work and to enable a summary of the main results of the inquiry, giving the particulars required for a revision of the basis of the cost-of-living index number, to be completed at the earliest possible date.

Mr. Hiģģs: Is my right hon. Friend aware that wage rates are being based to a very great extent on the index figure; and is it not imperative that it should: be revised at the earliest possible moment?

Mr. Brown: We had that and other things in mind 18 months ago when we decided to do this very formidable thing on a wider scale than it has been done in any other country.

Mr. T. Smith: Can the Minister say what obstacles are in the way of a quick decision in view of the fact that during the last 12 months repeated questions have been put down?

Mr. Brown: It is not a matter for consideration, but it is a matter of the extra physical and mental work of dealing with millions of entries. The individual entries about particular items of expenditure run into millions.

Oral Answers to Questions — CONSCIENTIOUS OBJECTORS.

Mr. Sorensen: asked the Minister of Labour whether it is the practice of tribunals dealing with conscientious objectors to discriminate adversely between those who base their appeal on religious and on ethical and political grounds, respectively; and whether an attempt is being made to secure reasonable similarity of judgment among all the tribunals?

Mr. E. Brown: Conscientious objection is not defined in the Act, and local tribunals have to use their own judgment in deciding whether an application, on whatever ground it may be based, is or is not of a conscientious nature. Both the applicant and the Minister have an unrestricted right of appeal to the Appellate Tribunal whose leading decisions will be circulated in order to secure reasonable uniformity among the local tribunals.

Mr. Sorensen: While thanking the right hon. Gentleman for his answer, is he aware that there is considerable disparity as between one tribunal and another with regard to both ethical and religious grounds and as to decisions?

Mr. Brown: I would not like to accept that, but, as the hon. Member knows, there are many tribunals, and I think at this stage it is quite premature for any general conclusion, because the hon. Member will understand that each case may be in a different atmosphere.

Mr. Lansbury: Can the right hon. Gentleman say when the appeal tribunal will sit?

Mr. Brown: There is a question about that later.

Mr. Stephen: Can the Minister say that he agrees that this House, in giving the right to conscientious objectors, meant to do so on all these grounds?

Mr. Brown: That is still the idea.

Mr. Stephen: But the right hon. Gentleman does not seem to be aware that some chairmen of tribunals—

Mr. Speaker: rose.

Mr. Glenvil Hall: asked the Minister of Labour whether he is aware that Francis Harrison Maw, a Quaker living at Milnsbridge, Huddersfield, was refused registration as a conscientious objector on religious grounds by the north-eastern local tribunal sitting recently at Leeds; and what steps he proposes to take to call the attention of those sitting on these tribunals to the legal rights of those who appear before them?

Mr. Brown: I am aware that the tribunal unanimously decided to register Mr. Maw on condition that he was employed only in non-combatant duties. I have no power to vary this decision but Mr. Maw may appeal to the Appellate Tribunal within 21 days of the local tribunal's decision. I have no reason to think that members of the tribunals are not fully aware of the legal rights of applicants.

Mr. Hall: Is the right hon. Gentleman aware that there is a very real fear that, if a member of a religious society such as the Society of Friends, cannot establish his claim to exemption, other people equally genuine are not likely to establish their claims and is not that in a way preventing the Act from working and the decision of the House from operating?

Mr. Brown: I think the hon. Member is wrong. It is not a matter of whether an applicant is a member of a particular religious denomination or not, but it is a question of the tribunal's judgment as to his conscience about military service, and, of course, the hon. Member will understand that all members of the Society of Friends do not necessarily take the view that the majority take.

Mr. McGovern: Is the Minister aware that, in many cases, decisions are being


made not merely on the basis as to whether the applicants have a conscience or not, but because of the fact that members of the tribunal are trying to browbeat them with tricky questions?

Mr. Brown: I do not think that at all.

Mr. Speaker: The hon. Member's remark is improper.

Mr. McGovern: I do not see anything improper in that; it is a statement of fact.

Major Milner: asked the Minister of Labour the number of conscientious objectors of whom notice has been given; the number of cases heard to date by area tribunals; and the results thereof by areas or tribunals, respectively, all to the latest convenient date?

Mr. Brown: Up to 31st October 9,526 men had been provisionally registered as conscientious objectors and 1,042 cases had been decided by the local tribunals. I am having an analysis made of the decisions by tribunals and will forward it to the hon. and gallant Member.

Major Milner: Up to what date?

Mr. Brown: Up to the last date.

Major Milner: asked the Minister of Labour the number of appeals lodged by conscientious objectors; the number of cases so far heard before the central tribunal; and the results thereof to the latest convenient date?

Mr. Brown: Up to date 68 appeals by conscientious objectors to the Appellate Tribunal have been received. The tribunal will be meeting shortly to begin hearing these cases.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

CLERICAL WORK (WOMEN APPLICANTS).

Mr. Neil Maclean: asked the Minister of Labour whether it is with his authority that female applicants for clerical and typing duties in the War Office, Ministry of Supply and other Government Departments are being asked to join the Auxiliary Territorial Service?

Mr. E. Brown: As was stated in reply to the hon. Member for Dartford (Mrs. Adamson) by my right hon. Friend the Secretary of State for War on Tuesday last no pressure of any kind is exerted by

Employment Exchanges to force women applicants for clerical work to join the Auxiliary Territorial Service. On the other hand, it is right that in present war circumstances the attention of such applicants should be directed to these vacancies, if they exist, along with others.

ADMINISTRATIVE POSTS (VACANCIES).

Mr. Shinwell: asked the Financial Secretary to the Treasury whether vacancies in the administrative posts of the Civil Service will occur in the near future; whether he can state the method of selection; and whether those persons who have been studying for the Civil Service will have a prior opportunity of selection?

The Financial Secretary to the Treasury (Captain Crookshank): Vacancies for administrative staff, arising from expansion or from the calling up for military service of men below the age of reservation, which cannot be supplied by promotion or by loan of personnel from Departments whose work is contracting owing to war conditions, are being and will be filled on a temporary basis from the central register of the Ministry of Labour and National Service. I am afraid that it would be impracticable to adopt the suggestion in the last part of the question.

Mr. Shinwell: Can we have an assurance that all cases of selection will be made on the ground of merit alone?

Captain Crookshank: Yes, Sir. The Civil Service does require the best men available.

Mr. Maxton: Can young men who have already passed the examination apply to be entered on the register?

Captain Crookshank: I should like to have notice of that question. If they have passed the examination, I daresay in most cases they would have been taken on, and I do not quite understand the question, therefore.

Mr. Shinwell: Can young men from secondary schools have an opportunity of being selected or considered for appointments?

Captain Crookshank: I said that we were filling them up on a temporary basis from the central register of the Ministry of Labour and National Service. I do


not know that there is anything to prevent secondary school boys or anybody else from being registered.

Mr. Maxton: Is the right hon. and gallant Gentleman aware that a number of men have sat in examinations for the Civil Service and have passed, and then have had their money refunded to them and told they can go anywhere they like? I ask whether these men, on the basis of having passed that examination, can be put on this central register and have an opportunity of appointment alongside of those who have not passed the examination?

Captain Crookshank: I said that there is nothing to prevent anyone from putting themselves on the register.

Mr. Maxton: Do I not understand that certain educational standards are necessary before you can go on the central register?

Captain Crookshank: No, Sir. For details, the hon. Member must ask the Minister of Labour, but I understand that anyone who is hoping to get one of these appointments can put his name on the register.

Mr. J. Griffiths: How is the register compiled?

Captain Crookshank: I do not compile it. The hon. Member had better ask the Minister of Labour.

Oral Answers to Questions — INDIA.

GOVERNMENT.

Mr. Kirkwood: asked the Under-Secretary of State for India whether, with a view to securing the wholehearted cooperation of India with this country, he will immediately issue a pronouncement that it is the Government's policy to grant responsible self-government to India as soon as may be feasible and that for this purpose representatives of all the leading parties and communities will immediately be invited to attend a conference for the purpose of framing a constitution to embody full and responsible self-government for India?

The Under-Secretary of State for India (Sir Hugh O'Neill): As regards the first part of his question, I would refer the

hon. Member to the Governor-General's statement of 17th October and to subsequent observations on it by the Lord Privy Seal and my Noble Friend the Secretary of State respectively, in both Houses of Parliament. As regards the second part of the question, I can add nothing to the statement made by my Noble Friend on 7th November, the substance of which I repeated in this House.

Mr. Kirkwood: Does not the Under-Secretary of State for India realise that I am here giving him a glorious opportunity to hand his name down to history as the individual who initiated the idea of giving India self-government, so as not to leave India in the same condition as we have left Ireland at the moment?

Sir H. O'Neill: I am very much obliged to the hon. Member for the opportunity.

CENSORED MESSAGES.

Mr. Sorensen: asked the Secretary of State for the Home Department why cable messages to the Amritz Bazar Patrika, of Calcutta, on 28th and 29th October, were mutilated, in view of the fact that the censored sentences had appeared in the British Press; whether newspapers with those sentences in their news will be allowed to be sent to India; and whether he is aware that such censorship leaves the impression that news sent from Great Britain to India is not objective and therefore is unreliable?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): I have been asked to reply. The hon. Member's question refers to a number of messages, some of them being similar to articles already published in the Press here, which were stopped by the Censor, since they contained unfriendly references to neutral countries, or suggestions as to Allied negotiations and war aims which tended to be misleading. It is true that some of the matter censored, having been published in the Press of this country, will eventually be received in India in the English newspapers; but such belated and restricted publicity would not be calculated to do so much harm as the publication in India of these messages when telegraphed from England as representing the latest news. This aspect of the question is receiving further examination in the light of this particular case.

Mr. Sorensen: Do I understand that any of these messages which may be represented in the national Press are quite harmless provided that some time has elapsed?

Mr. Butler: No, Sir, the matter is not quite as simple as that.

Oral Answers to Questions — WORKMEN'S COMPENSATION.

Mr. James Griffiths: asked the Home Secretary whether it is proposed to review the present scale of payments under the Workmen's Compensation Act in relation to the increase of the cost of living; and whether it is his intention to take such steps as were taken during the last war to make war payments additional to the existing payments under the Act?

Mr. Whiteley: asked the Home Secretary whether he is now in a position to say if the Royal Commission on Workmen's Compensation are to resume their duties; and whether it is the intention of the Government to bring forward a Bill to increase compensation payments immediately?

Mr. R. J. Taylor: asked the Home Secretary whether he is aware of the prevailing distress caused by the inadequate payments for workmen's compensation; and whether he is prepared to relieve this distress by increasing the existing payments?

Mr. Gordon Macdonald: asked the Home Secretary whether he can now state the result of the informal discussions on the question of an increase in the rates of workmen's compensation?

The Secretary of State for the Home Department (Sir John Anderson): Progress has been made with the informal consultations on this subject. It has not yet been possible for the Government to complete their review of the position in the light of these consultations, but I hope to be able to make a decision known very shortly.

Mr. J. Griffiths: Will the right hon. Gentleman bear in mind that there is a very widespread demand for an immediate increase in workmen's compensation, and will he do his best to expedite a decision?

Sir J. Anderson: I have been doing my utmost to expedite consultation.

Mr. David Adams: asked the Home Secretary whether his attention has been called to a recent legal decision by the court of appeal that if a workman accepted any payment under the Workmen's Compensation Act he thereby debarred himself from the right to take further action at common law; and whether he will make a statement as to the practical effect which this decision is expected to have upon workmen's compensation?

Sir J. Anderson: There have been a number of decided cases as to the circumstances in which a workman should be held to have made a concluded election between the two classes of remedy open to him, namely, proceedings under the Workmen's Compensation Act or proceedings under the general law: and I am advised that the effect of the recent decisions is that the acceptance by a workman of payments under the Workmen's Compensation Act must be treated as evidence of a concluded election debarring him from the right to take alternative action under the general law. The questions raised by these decisions are bound up with the general question of the relationship between workmen's compensation and damages under the general law, and I could not undertake to deal with this large subject within the scope of a reply to a Parliamentary question.

Mr. Adams: As we are likely to have a new Workmen's Compensation Bill at, we hope, not a remote period, will the Minister take particular note of injustices of this sort which fall under this part of the Act on the workmen and do not fall in similar circumstances on the employing classes?

Sir J. Anderson: I have made note, and my answer implies that the problem raised is a very large one.

Mr. J. Griffiths: Is the Minister prepared to consider a suggestion that where a man in ignorance accepts workmen's compensation, and he afterwards seeks advice of his union, he will be able to reconsider the matter and take action accordingly?

Sir J. Anderson: I am sure there will be opportunity for consultation on such a point as that.

Mr. Garro Jones: While not expecting the right hon. Gentleman to go into the


matter at length now, will he state that he recognises the injustice to a man who has a claim under the Workmen's Compensation Act and a claim under the common law for compensation, where the latter may be ten times or more as great as the claim under the Workmen's Compensation Act, that by ignorance of the law he should be prejudiced, perhaps, to the amount of thousands of pounds? Will the right hon. Gentleman take that matter into consideration in his next legislative proposals?

Sir J. Anderson: I think the House will recognise that these claims are of a very speculative character. The point is not being lost sight of.

Oral Answers to Questions — BRITISH COUNCIL FOR CHRISTIAN SETTLEMENT IN EUROPE.

Mr. Thurtle: asked the Home Secretary whether his Department has any information as to the sources from which the organisation calling itself the British Council for Christian Settlement in Europe derives its finances?

Sir J. Anderson: My information is that this body has at present no list of subscribing members. As regards such initial expenses as have been incurred, I have no reason to think that the funds have been provided otherwise than by contributions from the organisers.

Oral Answers to Questions — CIVIL DEFENCE.

AIR-RAID PRECAUTIONS WORKERS.

Mr. Davidson: asked the Home Secretary the number of paid air-raid precautions workers in Glasgow who are engaged in other partial or full-time employment?

Sir J. Anderson: I am informed that there are about 100 such persons, but I have no details as to the extent to which they are engaged on other work and I am looking into the matter further.

Mr. Rhys Davies: asked the Home Secretary whether he is aware that some paid air-raid precautions workers are dismissed their posts immediately they fall sick and unable to attend to duties; and whether he will take steps to modify this regulation and thereby remove what is

regarded as a grievance among these workers?

Sir J. Anderson: I have this matter under review at the present time and hope to announce appropriate conditions at a very early date.

Mr. Davies: Will the right hon. Gentleman bear in mind the anomalous position that an air-raid warden is not allowed to fall sick?

Sir J. Anderson: That is not an anomaly.

Mr. C. Brown: Is it not the case that a great many more will fall sick under the new regulation of a 12-hour shift?

Mr. Isaacs: asked the Home Secretary whether he is aware that in some Greater London areas the number of steel helmets and respirators available for airraid wardens is about one-third less than the number of wardens, with the result that these articles of equipment are in common use; and whether, in view of such unhygienic practice as well as the probability that in the case of air attack all the wardens would turn out for duty, he will take immediate steps to ensure that every warden has his own steel helmet and his own respirator?

Sir J. Anderson: The issues of steel helmets and civilian duty respirators to all authorities in the London Civil Defence Region are more than sufficient to provide one each for all wardens on the authorised establishment. The Government has never undertaken to provide equipment for reserve personnel in excess of the authorised establishment, and additional equipment for them cannot at present be issued.

Mr. Isaacs: If I supply the right hon. Gentleman with a list of such cases will he look into them?

Sir J. Anderson: Most certainly.

Sir Francis Fremantle: Is the right hon. Gentleman prepared to replace the steel hats by the improved bowler hat type which has recently been announced?

AIR-RAID PRECAUTIONS, FIFESHIRE.

Mr. Gallacher: asked the Home Secretary whether he has considered the reports from air-raid precautions wardens


in Culross, Buckhaven and North Queens-ferry, all expressing dissatisfaction with the organisation of defence and safety precautions in these areas; and, in view of the general disquiet throughout the area, will he institute an immediate inquiry into the conditions of air-raid precautions in Fifeshire?

Sir J. Anderson: A number of points of detail which have recently been brought to my notice have already been investigated, but I am awaiting a further report from my local officers and when this has been received, I hope within the next few days, I will communicate further with the hon. Member.

Mr. Gallacher: Is the right hon. Gentleman arranging for his officers to visit this area and talk over the matter with the air-raid wardens?

Sir J. Anderson: The hon. Member knows that my officers visited this area a little time ago, and I must leave it to them to judge whether a further visit is necessary.

LIGHTING RESTRICTIONS.

Captain Sir William Brass: asked the Home Secretary whether, in view of the number of prosecutions of householders, some successful and others dismissed, in different parts of the country, both in vulnerable and non-vulnerable areas for showing small cracks of light from the sides of windows, he will give some indication to the country generally what amount of light in candle-power, and exposed for what period of time and viewed from what angle, is considered to be an infringement of the regulations; and whether these restrictions apply equally all over the country, including railway goods yards?

Sir J. Anderson: The same considerations cannot apply to both internal and external lighting. The Lighting (Restrictions) Order requires complete obscuration of internal lighting. External lighting, on the other hand, cannot be completely obscured; and where outdoor activities must in the national interests be carried on through the hours of darkness—for example, in docks and railway marshalling yards—specific exemptions are made under the Lighting Order allowing lights to be used subject to their being suitably

shaded and of a reduced intensity. As regards internal domestic lighting, the Order requires complete obscuration; but the police are exercising a reasonable discretion in enforcing this requirement by proceedings in the courts, and I understand that as a general rule proceedings are taken only in cases where there has been a flagrant breach of the Order or where the offence has been repeated after a warning has been given.

Sir W. Brass: Is the right hon. Gentleman aware that this is interpreted differently in different parts of the country? In Oxford there were 40 cases in a week as against only 58 cases in the Metropolitan area for the whole month. Will he make representations to the chief constable of Oxford on this question?

Sir J. Anderson: I will see that the effect of my reply is communicated to the Oxford authorities.

Mr. Charles Williams: Does this regulation apply to Government Departments?

Sir J. Anderson: Yes, Sir. On a former occasion I said that appropriate action had been taken to secure compliance with the order by Government Departments?

Mr. Sorensen: Is the right hon. Gentleman aware that a woman was prosecuted last week because she inadvertently left the blind up?

Sir J. Anderson: I was not aware of that.

POLICE WAR RESERVE.

Mr. Glenvil Hall: asked the Home Secretary whether he is aware that middle-aged men who joined the Metropolitan Police War Reserve before war was declared and have since been called up for full-time duty have, in some cases, been dismissed by their employers and have thus lost not only their civilian employment but also many years' pension rights; and if he will consider extending to this and similar organisations the legislative protection against unfair dismissal now afforded men who join His Majesty's forces?

Sir J. Anderson: I am informed by the Commissioner of Police that out of more than 2,500 members of the Police War Reserve who have returned to civil life, only one has reported any difficulty of


this kind. In this one case representations are being made to the employer concerned. Hitherto it has not been felt that there is a case for amending legislation, but the question will be further considered if need for such legislation should arise.

Mr. Hall: This is the case of a man who is still serving; and if I bring the details to the attention of the right hon. Gentleman will he be good enough to make representations?

Sir J. Anderson: I shall be much obliged to the hon. Member.

LOCAL EDUCATION AUTHORITIES' EXPENDITURE.

Mr. Edmund Harvey: asked the Home Secretary whether, in view of the urgent need to expedite the re-opening of schools which are now closed because of the absence of air-raid precautions, and the difficulty of local education authorities in meeting the cost involved by adequate precautionary measures, he will be willing to reconsider the proportion of the Government grant-in-aid of air-raid precautions made to local education authorities?

Sir J. Anderson: As I have previously stated in the House, the Government have not been able to treat the special rates of grant provided by the Air-Raid Precautions Act as applicable to expenditure on air-raid precautions in schools. But my Noble Friend the President of the Board of Education has decided that the grant payable by the Board to local education authorities in respect of air-raid precautions in schools shall in no case be less than 50 per cent.; and that, where the grant in respect of elementary education generally is at a higher percentage than 50 per cent., the grant in respect of air-raid precautions in elementary schools shall be increased to that higher percentage. Hon. Members will be aware that, where additional expenditure is incurred in reception areas for the protection of evacuated children, such additional expenditure will rank for 100 per cent. evacuation grant.

MEDICAL SERVICE.

Mr. David Adams: asked the Minister of Health whether any definite instructions have been given by the Ministry as to the number or proportion of medical officers who should be trans-

ferred from evacuation to reception areas; and whether he is, in all cases, satisfied with the medical services now functioning both in evacuation and in reception areas or what further steps he proposes to take to meet the greatly increased strain placed upon the public medical services by evacuation?

The Minister of Health (Mr. Elliot): On the first part of the question, the hon. Member is no doubt aware that evacuating authorities have been urged to assist the authorities in reception areas by the transfer of staff where the conditions in the reception areas are such as to call for additional staff. In view of the varying circumstances in such areas it would not, I fear, be practicable for me to lay down definite figures such as the hon. Member contemplates. As regards the second part of the question, I believe that, in general, the medical services provided in evacuation areas and reception areas have done and are doing excellent work, bearing in mind the special conditions created by the emergency, but I have the matter under constant review. I shall be very willing to consider any local difficulties or deficiencies which may be brought to my notice.

Mr. Adams: Is the Minister aware that certain cases have come to my notice of difficulties in obtaining medical assistance?

Mr. Herbert Morrison: Does the right hon. Gentleman realise that it is an untidy arrangement that this matter should be left to individual arrangements; and will he now accept responsibility for the mobilisation of the medical assistance which may be needed in the reception areas?

Mr. Elliot: It may be untidy, but there is a danger of over-planning these things and of seeking to do too much by regulation. I think the arrangement which we have at present, if properly worked, will obviate the difficulties.

Mr. W. Roberts: Is the right hon. Gentleman aware that in some cases in which county authorities have asked for assistance, they have not been able to get it?

Mr. Elliot: I shall be willing to consider any cases of the kind which the hon. Member may bring to my notice.

HOSPITAL BEDS, LONDON.

Dr. Howitt: asked the Minister of Health how many London hospital beds were evacuated at the commencement of war, and how many of these beds are to-day available for the treatment of civilian sick?

Mr. Elliot: At the commencement of war, about 8,000 hospital beds in the County of London were evacuated by sending patients either to their homes or to other institutions, and in addition there were about 7,500 beds already vacant, making 15,500 in all. At the present time there are in these hospitals about 13,000 vacant beds available not only for casualties but also for the civilian sick, who, as I have made clear on several occasions, are being admitted to the hospitals if they are in need of in-patient treatment. I will send my hon. Friend a copy of a letter recently sent to London hospitals on this subject.

Dr. Howitt: May I further ask my right hon. Friend whether a sufficient number of physicians, surgeons and specialists have now returned to London to enable the hospitals to deal adequately with the civilian population?

Mr. Elliot: I am advised that adequate medical and nursing personnel is available at these hospitals for the cases which are at present coming forward, but as my hon. Friend knows, further proposals were made to me last Friday by a special committee which was representative of all sides of the profession, and those proposals are now under active consideration.

Mr. Crowder: asked the Minister of Health whether he will consider authorising the immediate re-opening of London hospitals for the treatment of civil sick on a much larger scale than at present?

Mr. Elliot: A special inquiry which I made on Monday showed that the nine big London hospitals—the London, St. Bartholomews, University College, Middlesex, St. Mary's, Westminster, St. Thomas', King's College and Guys Hospitals—all have vacant beds available for the ordinary needs of the population. I am, however, carefully examining in consultation with the governing bodies and their staffs what steps are possible to increase the facilities and beds available at the central hospitals.

MOTOR COACH AMBULANCES, LONDON.

Mr. R. C. Morrison: asked the Minister of Health whether he is aware that 12 motor coaches, with drivers, requisitioned for ambulance work have been standing in the roadway opposite a North London town hall since 1st September; and will he consider whether, in this and similar cases, some less expensive arrangement can be made?

Mr. Elliot: I am keeping the question of the modification of arrangements for dealing with possible air raid casualties under constant review and am at present considering the possibility of releasing a proportion of the motor coaches which have been converted for use as ambulances.

Mr. Morrison: Could not the right hon. Gentleman make some less expensive arrangement than that of having a long line of motor coaches standing by, night and day, with their drivers, in the roadway in some cases within 50 yards of a garage?

Mr. Elliot: If adequate measures are not taken for the London population in the case of air raids, it is I who will be held responsible, and I must keep that always under consideration in connection with the facilities arranged for dealing with London sick or casualties.

FIRST-AID POSTS (NURSES).

Mr. R. C. Morrison: asked the Minister of Health whether, in view of the large number of qualified and experienced hospital nurses at present disengaged, he will permit local air-raid precautions committees to engage an additional professional nurse for each first-aid centre?

Mr. Elliot: The establishment of a first-aid post includes one trained nurse. I do not feel in a position to recommend the enlargement of this establishment.

Mr. Morrison: Does the right hon. Gentleman realise that one trained nurse at a first-aid post cannot be continuously on duty and that therefore there are bound to be long periods during which there is no trained nurse available, and does he appreciate that in certain circumstances it may be necessary to have at least one trained nurse?

Mr. Elliot: The general professional staff is not continuously on duty at first-aid


posts. These establishments have been very carefully worked out, and I should certainly be rather dubious at the present time about enlarging them.

Mr. Morrison: Will the right hon. Gentleman not look at this question also from this point of view, that there are hundreds, even thousands, of trained hospital nurses at present disengaged and not earning any money at all?

Mr. Elliot: There are many trained personnel of various kinds disengaged, and I do not think we can look at it entirely from that point of view. We must look at it from the point of view of the efficiency of the service.

AUXILIARY FIREMEN (INJURY ALLOWANCES).

Mr. Dingle Foot: asked the Minister of Pensions whether he has now reconsidered the arrangement whereby auxiliary firemen injured in the course of their duties are expected to apply to the Unemployment Assistance Board for relief pending the determination of their claims by the Ministry of Pensions; and whether it is proposed to make any alteration in this system?

The Minister of Pensions (Sir Walter Womersley): The hon. Member is under a misapprehension. The Unemployment Assistance Board does not in these cases provide relief in the usual sense, but acts as my agent for the purpose of administering Part II of the Personal Injuries (Civilians) Scheme, 1939. Injury allowances under this part of the scheme are provided by the Unemployment Assistance Board in respect of war service injuries at the flat-rate scales laid down in the scheme, without regard to means or need.

Mr. Foot: Is it not a fact that in some cases questions have been put to applicants for firemen's posts similar to those put to applicants for unemployment assistance?

Sir W. Womersley: Such statements have been made in this House, and I have asked hon. Members who have made them to forward to me any specific case, but none up to now have reached me. In any case, if the hon. Member will let me have it, I will inquire into it.

Mr. Viant: Has the hon. Gentleman overlooked the case that I sent to him and that I mentioned in the Debate here?

Sir W. Womersley: No, I have not overlooked that case.

Oral Answers to Questions — CINEMAS (SUNDAY OPENING, CONDITIONS).

Mr. Denville: asked the Home Secretary whether he is aware that a western county council gave permission for cinemas in seven towns to be open at five o'clock on Sundays; and will he give the authority under which they imposed the condition that soldiers' women-folk were not admitted with them?

Sir J. Anderson: Under the provisions of the Sunday Entertainments Act, 1932, a licensing authority which is empowered to allow the opening of cinemas on Sunday may impose such conditions as it thinks fit. I have no power to interfere with the discretion of the local authority but I am making inquiry about the matter referred to in the question.

Mr. Denville: Is it not the meaning of the Act that reasonable conditions should be imposed; but is it a reasonable condition to say that a soldier can go but he cannot take his wife?

Sir J. Anderson: I have no power to give an authoritative ruling in the matter, but I am making inquiries.

Mr. Ede: If the right hon. Gentleman finds that the facts in the question are substantially correct, will he suggest that it is a wholly improper condition to attach?

Sir J. Anderson: I will consider the matter in the light of the facts.

Oral Answers to Questions — DEFENCE REGULATIONS (DETAINED BRITISH SUBJECTS).

Mr. Rhys Davies: asked the Home Secretary the number of British-born subjects detained for more than a fortnight in this country without trial, and the numbers of such persons so detained since the declaration of hostilities, giving the periods in weeks of their detention?

Sir J. Anderson: If, as I presume, the hon. Member is referring to cases of persons detained on security grounds under Regulation 18B of the Defence Regulations, the number of British subjects so detained is 25. As the answer to the second part of the hon. Member's question contains a number of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following are the figures:


Length of Detention.
Number.
Examined by Advisory Committee.
Released.
Not lodged objection.


9–10 weeks
…
…
…
10
8*
—
1


8 weeks
…
…
…
3
3
2
—


7 weeks
…
…
…
3
3
2
—


6 weeks
…
…
…
2
2
—
—


4 weeks
…
…
…
4
3
2
1


3 weeks
…
…
…
1
—
—
1


2 weeks
…
…
…
2
1
—
1


Total
…
…
…
25
20
6
4


* In addition one case is awaiting hearing, the case of a person interned as a German who has claimed to be a British subject (of dual nationality).

Oral Answers to Questions — PRESS AND CENSORSHIP BUREAU.

Mr. Mander: asked the Home Secretary what criticism or commentary has been issued through the Press and Censorship Bureau to the Press during the last three weeks, with reference to speeches made in this House by hon. Members; and on whose authority?

Sir J. Anderson: I have made inquiries and find that on one occasion during the last three weeks a statement commenting on a speech made in this House was issued unofficially through the Press and Censorship Bureau. On the following morning the matter was brought to the attention of the Director-General, who immediately took steps to prevent a recurrence of such a proceeding. It is fully recognised that it is not within the functions of the Press Bureau to comment on views expressed in this House, and I wish to express on behalf of the Bureau regret for their error.

Mr. Mander: In view of the fact that this statement, which referred to a Conservative Member of this House, was only issued through the Press and Censorship Bureau, can the right hon. Gentleman say which was the originating authority that issued the statement? Was it the War Office, or what other Department?

Sir J. Anderson: I hope I shall not be pressed on that matter. An error has been made.

Oral Answers to Questions — ALIENS (INTERNMENT).

Mr. Sorensen: asked the Home Secretary how long friendly aliens, who have been temporarily interned or whose

application has been rejected, have to wait before their appeal can be heard; how many of such friendly aliens have been interned; and whether the five-mile restriction on the movement of certain friendly aliens will be varied or suspended after a period of three months?

Sir J. Anderson: As regards persons who have been interned, if the hon. Member will send me particulars of any cases in which he thinks the tribunals have ordered the internment on security grounds of Germans or Austrians whose friendly disposition to this country is so clear that their internment was unjustified, I will look into such cases at once. The tribunals have ordered internment in a very small proportion of the cases which they have reviewed and my impression is that they have exercised their discretion with great care. As regards those cases in which the tribunals have decided that Germans or Austrians ought on security grounds to be required to get a police permit if they wish to travel, I know of no reason for varying or suspending this requirement after a fixed period of three months.

Mr. Sorensen: While appreciating the reply, may I ask the right hon. Gentleman whether he does not think it an unnecessary hardship to impose on certain alien women in this country the condition that they cannot travel more than five miles from where they are supposed to live, and therefore very often cannot see their own children, who may be in some other part of the country?

Sir J. Anderson: The condition can be imposed only on security grounds, and it is imposed only after the tribunal have gone into the merits of the case.

Mr. Sorensen: If a woman is adjudged sufficiently innocent of any subversive acts against this country to be free to wander within a radius of five miles, could she not do damage within that five miles just as much as she could outside it?

Sir J. Anderson: The alternative is internment.

Miss Rathbone: Can the right hon. Gentleman say whether those cases have been revised where aliens were put in category B subsequent to the period when the right hon. Gentleman issued a circular disparaging the use of category B, and can he say whether those cases of restriction have been revised since the use of category B was advised against by his Department?

Sir J. Anderson: I think I had better send the hon. Lady a written reply to that question.

Oral Answers to Questions — EDUCATION.

CLOSED ELEMENTARY SCHOOLS, WEST RIDING.

Mr. Dunn: asked the Parliamentary Secretary to the Board of Education whether he is aware that elementary schools in the West Riding of Yorkshire are closed owing to no air-raid shelters being provided; that three schools are now closed in Maltby in the West Riding of Yorkshire; that many children are deprived of their education; that builders and their staffs who could immediately do the necessary work are out of work; and will he take steps to see that the services of these builders are utilised at once to construct the necessary shelters, and enable education to be carried on?

The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): I am aware that some elementary schools in the West Riding are closed pending the provision of air-raid shelters. Of the four elementary schools in Maltby, one is closed, one is open in full session, one is in part-time session, half the children attending in the morning and half in the afternoon, and the other is to open next Monday for the instruction of small groups of children while shelter is being completed. I am informed that delay in the construction of shelters has been due in the main to difficulty in

obtaining materials and sites for trenches: the authority do, in fact, I understand, employ local builders where possible.

SECONDARY EDUCATION (EVACUATED CHILDREN).

Mr. Ede: asked the Parliamentary Secretary to the Board of Education what steps are being taken to ensure that officially and unofficially evacuated children now approaching secondary school age shall not have their chances of securing secondary education worsened if they remain in reception areas?

Mr. Lindsay: The problem to which the hon. Member refers falls into two parts. Special arrangements will have to be made for conducting the examination of evacuated children for admission to secondary schools. This is a matter primarily for local education authorities and they are already considering, with the assistance of the Board, what methods will be most appropriate to local circumstances. The other part of the problem concerns the grouping of new entrants in reasonable proximity to a secondary school. This will, in some cases, involve rebilleting, and a Circular on this subject, a copy of which I am sending the hon. Member, has recently been issued by the Board. The financial adjustment is primarily a matter for the education authorities concerned and I am meeting their representatives, as the hon. Member knows, next week to discuss this whole question.

Mr. Ede: asked the Parliamentary Secretary to the Board of Education how many unofficially evacuated children normally in attendance at schools supported out of the higher education rates are at present not getting that form of education; and will he give the figures for children in Anglesey, Cornwall and Devonshire, respectively?

Mr. Lindsay: The question of secondary education in the three counties named is complicated and different in each case. I am making inquiries, which of necessity cannot be complete, in order to obtain a clearer picture of the position of unofficial evacuees, as regards secondary education.

SCHOOL-LEAVING AGE.

Mr. Dunn: asked the Parliamentary Secretary to the Board of Education, why


the Government have decided that schoolchildren may now leave school on attaining their fourteenth birthday without waiting for the end of the school term?

Mr. Lindsay: The Government have given no such decision. Under Section 138 (1) of the Education Act, 1921, a child attending a public elementary school who attains the age of 14 during a school term cannot leave school till the end of the term. The position in that respect remains unchanged; but if the school is not open at the date of the child's fourteenth birthday the Section can have no application.

Mr. Dunn: Has the attention of the Parliamentary Secretary been called to the fact that one newspaper in the country has already made a statement quite contrary to the announcement he has given?

Mr. Lindsay: I hope that the question and answer will correct that.

Sir Percy Harris: In the case where a child arrives at the school-leaving age, does the child automatically go home to its evacuation area or stay on in the reception area?

Mr. Lindsay: It will stay on.

Mr. James Hall: Is the Parliamentary Secretary aware that many children who are reaching the age of 14 years are actually starting work? Can he do something to prevent this?

Mr. Lindsay: I should like to know where the children are; and if the hon. Member will give me particulars I shall be glad to consider them.

YOUNG GRADUATES (TEACHING APPOINTMENTS).

Mr. Hannah: asked the Parliamentary Secretary to the Board of Education whether his attention has been called to the handicap experienced by young university graduates seeking appointments in teaching from the unwillingness of headmasters to employ men who may be conscripted; and will he take steps to give them some relief?

Mr. Lindsay: My attention has not been specially called to the matter. While I should hope that local education authorities and governing bodies would be pre-

pared to entertain applicationsfrom young graduates who would be in a position to remain in their teaching posts for a reasonable period, my hon. Friend will realise that they might well find it difficult to appoint persons who are within a few months of being called up. I am not sure what form of relief my hon. Friend has in mind, but if some form of financial assistance is contemplated, there are no funds at the disposal of the Board from which such relief could be given.

Mr. Hannah: Is it not a fact that in some cases it is not a matter of two months, but of two years that is in question?

Mr. Lindsay: I should like to know of any such cases.

CRIMINAL JUSTICE BILL.

Mr. Leach: asked the Prime Minister whether he will explore the possibilities of an agreement being effected relative to the flogging provisions contained in the Criminal Justice Bill, and give facilities for the passage of the Bill?

The Lord Privy Seal (Sir Samuel Hoare): Sympathetic consideration has been given to this question. In view of the substantial measure of agreement on the main provisions of the Bill and of the time already given to its consideration, the Government would have been glad if some further time could have been found to carry its main provisions through the further stages. But the Bill covers a wide field and examination of its provisions shows that if it were to proceed a very substantial amount of time would have to be given by Ministers and Departmental officials to consideration of some of its Clauses and of many amendments relating to important details. In present circumstances the Government have reluctantly come to the conclusion that time could not be found for this work without prejudice to the effort on which all our energies must now be concentrated.

Mr. Leach: Does the right hon. Gentleman realise the strength of feeling in all parts of the House in favour of passing this Measure into law, and is it not still possible to make some arrangements through the usual channels whereby the


difficulties which the Lord Privy Seal has just mentioned may be completely obviated?

Sir S. Hoare: I recognise as strongly as anyone in this House—perhaps even more strongly than some—the strength of the support behind this Measure. There is no Bill that I would myself rather see passed into law. The difficulty is not the difficulty of the time of this House; it is the difficulty of the Government draftsmen and the departmental officials. Very reluctantly and much against my will I have been convinced that, in the circumstances, it is impossible to impose this further task on them.

Mr. Attlee: Will the right hon. Gentleman give further consideration to this, in view of the general desire that the important reforms contained in the Bill should be passed, and that all that work should not be lost? Would it not be possible to get assistance in drafting from eminent counsel and others, who perhaps have less work to do owing to the war, and to get the Bill through, as it would be extremely unfortunate if all that work should be lost?

Sir S. Hoare: I am as sorry as anybody in the House can be about the present position in this matter. I will convey the right hon. Gentleman's observations to the Prime Minister, but, again, I must say that the difficulty is the difficulty of imposing an almost impossible task upon the Government draftsmen and the Departmental officials.

Mr. Thorne: If time cannot be found during this Session, could not provision be made to carry the Bill over to the next Session?

Mr. Graham White: May I ask whether, in addition to the considerations which the right hon. Gentleman has mentioned, and which the House recognises, he has also given consideration to the great propaganda effect of passing through the British Parliament a great humane measure such as this at a time when the world is dominated by brutality and violence?

Sir S. Hoare: Certainly, I will take note of that fact. I do not want to get into any controversy with the hon. Gentleman on this subject. Again, I say that the difficulty is the difficulty of the Government draftsmen and the Departments. In

reply to the question of the hon. Member for Plaistow (Mr. Thorne), as he knows, Bills cannot be carried over, except private Bills, but I should very much hope—and here I am expressing a personal opinion—that in some early Session a Bill of this kind will be introduced and will without delay be passed on to the Statute Book.

Mr. Thorne: Could not a Resolution be passed through the House in a very short space of time to get the Bill carried over?

Mr. Rhys Davies: In view of the very great amount of time which we spent on this Bill in the Standing Committee, and in view of the expressions of opinion which the right hon. Gentleman has heard given here to-day, is it not possible for the Cabinet to reconsider this decision?

Lieut.-Colonel Sir Thomas Moore: Could not a Clause be inserted in the Bill postponing the action of the Bill until after hostilities?

Commander Sir Archibald Southby: Will my right hon. Friend bear in mind that if this Bill were passed into law now, considerable expense would be incurred in putting its provisions into force, and that in the present state of the finances of this country, that would not be desirable?

Mr. Stephen: Could not the right hon. Gentleman follow the precedent that was adopted in connection with the London Passenger Transport Bill, and carry it over?

Sir S. Hoare: The hon. Member will remember that that was not a Government Bill, but a Private Bill.

Mr. Wedģwood Benn: Is there any objection to setting a precedent, especially in view of what was said by the hon. Member for East Birkenhead (Mr. White), in order that all the work done on this Bill should not be sacrificed? Could not a Resolution be drafted, and find acceptance by the whole House perhaps, to carry the Bill over?

Oral Answers to Questions — AGRICULTURE.

GROUND GAME ACT.

Mr. Horabin: asked the Minister of Agriculture whether he will take steps to suspend the Ground Game Act for the period of the war as under the present restriction farmers cannot keep the rabbit


pest down effectively with the result that many tons of corn and other crops which could be saved for human consumption are destroyed?

The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): So far from the Ground Game Act, 1880, restricting farmers from keeping down rabbits on land in their occupation, it confers on them an inalienable right to shoot rabbits on such land. As regards rabbits on other land the powers given to county councils under the Prevention of Damage by Rabbits Act, 1939, which can be supplemented if necessary by the exercise of those provided under the Defence Regulations and delegated by me to county war agricultural executive committees under the Rabbits Order, 1939, should in my opinion be ample to deal with any cases where serious damage by rabbits is reported.

Mr. T. Smith: Is the right hon. and gallant Gentleman aware that there is another way of keeping rabbits down, if magistrates would turn a blind eye on some of the lads?

GRASSLAND (PLOUGHING-UP).

Mr. W. Roberts: asked the Minister of Agriculture whether, in view of the fact that the ploughing-out campaign requires a considerable amount of fencing to be done by farmers, he will arrange for adequate supplies of wire to be made available?

Sir R. Dorman-Smith: I understand that steps are being taken, within the limits of the available manufacturing capacity, to accumulate stocks of wire in the hands of the trade to meet the anticipated demand for various purposes including farm fencing. If any instances of difficulty in obtaining fencing wire are brought to my notice, I will be glad to examine them in consultation with my right hon. Friend the Minister of Supply.

Mr. Roberts: Is it not a fact that at the present time firms are being rationed to 50 per cent. of their normal requirements, and that this is preventing farmers from carrying out the necessary repairs?

Lord Apsley: May I ask my right hon. and gallant Friend whether, in order to provide against the danger of soil erosion in upland ploughlands, he will consider

the alternative of encouraging the growth of hedges, digging of ditches, and building of stone walls?

Sir R. Dorman-Smith: There are difficulties about wire fencing, but I am in close touch with my right hon. Friend the Minister of Supply, and we will do the best we can. The other point is of vital importance, and is also receiving my attention.

MILK MARKETING BOARD (PUBLICATION OF PRICES).

Mr. de Rothschild: asked the Minister of Agriculture why the figures fixed by the Milk Marketing Board for milk going into manufacture have been subjected to censorship and withheld from the public?

Sir R. Dorman-Smith: No censorship of any kind has been imposed on the publication of prices prescribed by the Milk Marketing Board.

Mr. de Rothschild: Is the right hon. and gallant Gentleman aware that during the last fortnight agricultural publications have stated that owing to the censorship, they were prevented from publishing these figures, and will he see that this is rectified?

Sir R. Dorman-Smith: I hope this question and the answer will correct that impression.

HILL EWES.

Mr. Boothby: asked the Minister of Agriculture whether owing to the greatly superior quality of their mutton, he will introduce a special grade for hill ewes?

The Under-Secretary of State for Scotland (Captain McEwen): I have been asked to reply. The scale of prices for fat sheep which will be prescribed when the Minister of Food takes full control has recently been the subject of discussion with the National Farmers' Unions of England and Scotland, and includes a class for light-weight ewes, which is intended to cover the hill ewes to which my hon. Friend refers.

Mr. Boothby: When does the Minister of Food intend to take full control?

Captain McEwen: Perhaps my hon. Friend would address that question to the Minister.

OATS (PRICE).

Mr. Boothby: asked the Minister of Agriculture whether, in view of the rising costs of production and the desirability of ploughing up the maximum amount of land, he proposes to raise the standard wholesale price of oats for the forth coming year; and whether he will make an early pronouncement on the matter in order that the farmers may know where they stand?

Captain McEwen: My hon. Friend will be aware that my right hon. Friend the Minister of Food announced yesterday that the Government propose to seek the approval of Parliament to an Order raising the standard price of oats of the 1939 crop to 9s. per cwt. or 27s. per quarter. As regards the forthcoming crops I would refer my hon. Friend to the statement made by the Minister of Agriculture on 19th October with regard to the difficulty of fixing standard prices for next year's crops and to the assurance given in that statement that it is the intention of the Government when the time comes to fix these prices to ensure to the farmers a reasonable return on crops harvested next year.

Mr. Boothby: While thanking my hon. and gallant Friend for his reply, may I take it that the price of oats will be kept under continuous review by His Majesty's Government, in relation to the cost of production?

Captain McEwen: Certainly.

Oral Answers to Questions — FOOD SUPPLIES.

POTATOES.

Mr. Boothby: asked the Minister of Agriculture whether he is in a position to state the intentions of the Government with regard to the production and distribution of potatoes?

The Parliamentary Secretary to the Ministry of Food (Mr. Lennox-Boyd): I have been asked to reply. My right hon. Friend the Minister of Food is not able to make a statement on this subject at the moment, but he has it under consideration in consultation with my right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture. It is hoped that it will be possible to make a statement shortly.

Mr. Boothby: Before the end of the present Session?

Mr. Lennox-Boyd: Certainly.

MARGARINE.

Sir Herbert Williams: (by Private Notice) asked the Chancellor of the Duchy of Lancaster whether he is now in a position to make a statement on the control of the manufacture of margarine?

Mr. Lennox-Boyd: Yes, Sir. In view of the supply position in regard to raw materials, my right hon. Friend is arranging with the industry for the immediate resumption of the manufacture of their own margarine, proprietary and otherwise, subject to certain conditions designed to ensure adequate supplies at reasonable prices for the consumer.

Mr. Sorensen: Is it intended that that supply will include margarine made from other oils than mineral oils?

Oral Answers to Questions — HOUSING (WALES).

Mr. J. Griffiths: asked the Minister of Health whether, having regard to the urgent need for the provision of new houses in various areas in Wales, and in particular in the rural areas, revealed in the Report on the Anti-tuberculosis Services in Wales, and in the surveys undertaken by his Department, he will give favourable consideration to the approval of schemes to meet the most urgent cases?

Mr. Elliot: I will certainly consider any such schemes most sympathetically, especially for the rural areas.

Oral Answers to Questions — INFANT WELFARE CENTRES, LONDON.

Dr. Howitt: asked the Minister of Health what arrangements he is making for the re-opening of infant welfare centres in London, in view of the fact that more than 50 per cent. of the infant population of London is now resident in London?

Mr. Elliot: I commuicated with all the metropolitan boroughs on this subject about the middle of October. Infant welfare centres are now open in the great majority of the metropolitan boroughs. The reopening of further centres is a matter in the first instance for the responsible welfare authorities, acting in the


light of their knowledge of local needs and of the facilities available in their areas. If my hon. Friend has any particular area in mind and will communicate with me, I shall be pleased to make inquiry.

Dr. Howitt: Will my right hon. Friend bear in mind the importance of having the same doctors returned to this service wherever possible as they are known to the mothers and will be better able to carry on with the work which they had been doing before the outbreak of war?

Mr. Elliot: I have that matter in mind. I am aware of the great importance which mothers attach to being attended by medical practitioners in whom they have confidence.

Oral Answers to Questions — MEDICAL PRACTITIONERS (WAR SERVICE).

Mr. Groves: asked the Minister of Health whether he will take steps to set right the position of a practitioner who signed the British Medical Association scheme for the protection of medical practices, and who was called up for the Royal Army Medical Corps immediately on the outbreak of war, and who, owing to the inability of obtaining any assurance as to the care of his patients, appointed a locum tenens, to the knowledge of the Insurance Committee, but who was refused payment by the committee of all the fees earned by him last quarter?

Mr. Elliot: If the hon. Member will supply me with particulars of the case he has in mind, I will look into it.

Oral Answers to Questions — SHORT-WAVE THERAPY.

Sir Ernest Graham-Little: asked the Minister of Health whether he is aware that considerable dissatisfaction exists among specialists practising physiotherapy because of the scanty utilisation of their expert skill in war-emergency service; whether he is aware that radiologists are by no means qualified to prescribe or administer physiotherapy or to advise regarding apparatus required for short-wave therapy; whether he will institute an immediate inquiry into, and report as to, the number of short-wave therapy machines now available in those hospitals

in which the Minister proposes to treat war casualties; and whether he will regard this question as urgent, in view of the fact that this method is essential in the early treatment of a large variety of war casualties, but that the supply of these machines, as well as the provision of skilled personnel to use them, is still deficient?

Mr. Elliot: I am aware that during the present lull uneasiness is felt by many specialists lest their skill and knowledge may not be fully utilised. I can assure my hon. Friend that the services of the specialists referred to will not be lost sight of when the need arises. In the meantime, I am advised by my consultant adviser in physical medicine that the present arrangements are adequate. In view of this, I do not consider that I should be justified in instituting the special inquiry suggested in the latter parts of the question.

Oral Answers to Questions — BRINE BATHS, DROITWICH.

Mr. De la Bére: asked the Minister of Health whether, with a view to removing any uncertainty which may exist in the minds of would-be patients who have in the past taken rheumatic treatment at the brine baths at Droitwich, he will inform the British Medical Association that the brine baths will be available for treatment during the whole period of hostilities, together with qualified and experienced doctors, and accommodation?

Mr. Elliot: I am aware of the valuable treatment facilities at present available at Droitwich and I understand that vigorous efforts are being made by all concerned to ensure that these facilities will continue to be available to all those in need of such treatment. I have the utmost sympathy with those endeavours and though, of course, I could not give an unqualified assurance to the effect suggested by my hon. Friend, I shall cooperate to the best of my powers with those responsible.

Mr. De la Bére: Is my right hon. Friend aware that the Droitwich brine baths are of national importance, and will he invoke the aid of the Press and of the B.B.C, in order to ensure that full use is made of them?

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

Major Milner: asked the Minister of Pensions whether, in connection with the Royal Warrant, he proposes to publish a schedule giving the standard degree of disablement, as was done in 1923, for the guidance of war pensions committees?

Sir W. Womersley: It is not the intention at the moment to issue to War Pensions Committees a similar publication to that of 1923.

Major Milner: Will the hon. Gentleman be good enough to discuss it with me on some occasion?

Sir W. Womersley: As the hon. and gallant Member knows, there is an advisory committee considering the Royal Warrant, and I am sure he will agree with me that it would be foolish to send out instructions until that committee has reported.

Oral Answers to Questions — ARMED FORCES (DEPENDANTS' ALLOWANCES).

Miss Rathbone: asked the Financial Secretary to the Treasury whether he is aware that there has been a widespread impression among service men's dependants that the Unemployment Assistance Board are empowered to supplement temporarily the separation allowances of those who are appealing to the Hardship (Special Allowances) Committee; and whether he will now clarify the position?

Captain Crookshank: The Government are examining urgently the possibility of accelerating supplementary payments in cases where such is judged necessary, and hope to make a statement on the subject shortly. The present position is that the Unemployment Assistance Board have no power under the Prevention and Relief of Distress Regulations, 1939, to pay allowances to persons who are actually in receipt of allowances payable out of public funds granted in respect of circumstances arising out of, or caused by, the present war.

Oral Answers to Questions — COAL RATIONING.

Mr. Georģe Hall: (by Private Notice) asked the Secretary for Mines whether he can make a statement about coal rationing.

The Secretary for Mines (Mr. Geoffrey Lloyd): Yes, Sir. The reasons for rationing coal used for domestic and similar purposes were first, to conserve stocks of coal already distributed throughout the country against the possible dislocation of sea and rail communications by enemy action; secondly, to make more coal available for export as a means of securing foreign exchange. There is at present no difficulty in providing for export the amount of coal which the available shipping can lift, and the important point remaining, therefore, is the state of stocks and present consumption in the large consuming areas, which, as I told the House last week, were the subject of survey. The stocks in most of the consuming areas are now satisfactory, and the need for drastic economy is, in view of existing circumstances, no longer so great as it was. The House will, however, appreciate that owing to enemy action these circumstances may change rapidly, and it might prove essential at very short notice to secure strict economy in the use of coal either generally or locally.
Meanwhile, as the' position is satisfactory, the Government feel that, relying upon the public to exercise economy, they can make a relaxation in regard to coal rationing. They have, therefore, decided to raise the percentage under the coal rationing scheme from 75 to 100 per cent. of last year's consumption.

Mr. Hall: Arising out of that reply, which will give great satisfaction generally and to the mining community particularly, may I ask whether it is the intention to keep the coal rationing organisation in existence, either wholly or in part?

Mr. Lloyd: Yes, Sir. To enable a reduced percentage under the rationing scheme to be made effective at short notice, should it prove necessary, the registration and the fixing of the basic quantities of the consumers of coal, gas, and electricity will need to be completed. This work, I hope, will be completed in a few weeks, and it will then be possible, if the position remains as at present, to close many of the local fuel offices and retain only a skeleton staff.

Mr. T. Smith: While appreciating the speed with which the hon. Gentleman has tackled this problem, might I ask him whether some collieries that have large


quantities of domestic coal in stock can be assured that they will have sufficient wagons to deal with it; and will he also deal with the short-time work which is now taking place at some collieries owing to the dislocation of transport?

Mr. Lloyd: I am in consultation with my right hon. and gallant Friend the Minister of Transport, and also with my right hon. Friend the Minister of Shipping, in regard to these matters, and I know that they are doing everything possible to deal with them.

Lieut.-Colonel Sir A, Lambert Ward: Does the Minister's statement apply to coal only, or does it include coke and other forms of domestic fuel?

Mr. Lloyd: Yes, Sir, it 'does include coke and other forms of domestic fuel.

Mr. Garro Jones: Is the Minister aware that the system is based upon the allocation of hard fuel by weight rather than by heating capacity and that, therefore, a person who can afford to buy anthracite has very much more fuel than a person who buys coke, and will he rationalise the system by taking that into consideration?

Mr. Lloyd: While I cannot reply without notice to technical points, I can say that this scheme was worked out in consultation with the coal merchants, and I believe it to be a practical scheme dealing with the realities of the case.

Oral Answers to Questions — QUESTIONS TO MINISTERS.

Mr. Cocks: May I put it to you again, Mr. Speaker, that there are 102 questions on the Order Paper to-day and that only 72 have been answered? In view of the fact that the House is not sitting on Monday, the Members are deprived of one hour of questions. Is it not possible, therefore, for you to use your influence so that the time for questions on Tuesday, Wednesday and Thursday is increased by a quarter of an hour?

Mr. Speaker: I prefer to leave a question of that kind to the House.

Oral Answers to Questions — HOLLAND AND BELGIUM (JOINT COMMUNICATION).

Mr. Attlee: (by Private Notice)asked the Prime Minister whether he can now

make any statement regarding the communication received from the King of the Belgians and the Queen of Holland?

Sir S. Hoare: I have been asked to reply. Yes, Sir. His Majesty's Government have been considering with the care which its importance demands the communication addressed by Their Majesties the Queen of the Netherlands and the King of the Belgians to His Majesty The King as well as to the President of the French Republic and to the German Chancellor. His Majesty's Government deeply appreciate the motives which have led the two Sovereigns to make this communication. While past experience does not enable us to be very hopeful of a satisfactory response from the German Chancellor, we have no desire to continue the war for a day longer than is necessary if a satisfactory settlement can be reached in another way. In due course it will be the duty of His Majesty's Government to tender to His Majesty their advice as to the nature of the reply he should make, but before they can do so it will naturally be necessary to consult with the Dominions and with our friends and Allies.

BUSINESS OF THE HOUSE.

Mr. Attlee: May I ask the Lord Privy Seal to state the business for next week?

Sir S. Hoare: The business will be:
Tuesday—Second Reading of the Chartered and Other Bodies (Temporary Provisions) Bill [Lords] and consideration of Lords Amendments to the Prices of Goods Bill. Questions affecting the Ministry of Shipping will be debated on the Adjournment.
Wednesday—Remaining stages of the National Loans Bill, the Chartered and Other Bodies (Temporary Provisions) Bill [Lords,]and of the Restriction of Advertisement (War Risks Insurance) Bill.
Thursday—The Adjournment of the House will be moved for a Debate on Education.
The House will not sit on Friday.

Miss Ward: May I ask my right hon. Friend whether he can make arrangements with the Opposition parties so that the Government's own supporters may occasionally share in putting down the


subjects for discussion on the Adjournment? One appreciates that during peace time provision is made for the Opposition parties to draw the attention of the Government to matters which they want to raise, but in war time, when all the legislation is war-time legislation, I think the county would like to know that the Government's own supporters on occasion have the right to share in the subjects that are raised for debate.

Sir S. Hoare: I should have thought that the general wish of the House was to maintain the procedure as it is now. If at any time there were any general feeling of dissatisfaction, no doubt it could be conveyed to the Prime Minister through the usual channels.

Mr. Attlee: May I ask whether the Prime Minister will be making a statement on any day next week?

Sir S. Hoare: I have not any information at my disposal to enable me to say either "yes" or "no." I imagine that the Prime Minister will communicate with the right hon. Gentleman, but I have no reason to suppose that he will not make a statement if the situation requires it.

Miss Ward: With regard to my right hon. Friend's reply to me, it is not a question of dissatisfaction, but of accommodation with the good will of the other parties. There are matters of great interest, which are not politically controversial, about which the country wants to hear certain views and discussions, but there is never any opportunity by which the Government's own supporters can draw to the attention of the Government certain important subjects that should be discussed?

Sir S. Hoare: My hon. Friend is, I think, under a misapprehension. Any question can be raised on the Motion for the Adjournment.

Sir Archibald Sinclair: We all very much regret the absence of the Prime Minister and hope that he will be back in his place next week. Whether that be so or not, may I express the hope that the practice of making a weekly statement, subject to exceptions such as in the present case, will be maintained so that Parliament may be kept informed of the progress of the war?

Sir S. Hoare: I am sure my right hon. Friend will be obliged to the right hon.

Gentleman for his personal reference. I will convey his observations to the Prime Minister and I have no reason to think that he will not comply with the suggestion.

Mr. Westwood: Can we have an assurance that when education is discussed next Thursday the right hon. Gentleman the Secretary of State for Scotland will be available, as there may be questions affecting Scottish education and administration which it may be desirable to raise.

Sir S. Hoare: I imagine, if that is so, that the Secretary of State for Scotland will certainly be present.

Mr. Lewis: May I ask whether opportunity cannot be given to Members to consider Bills before they come on for Second Reading? We have to-day the National Loans Bill before us, but it was circulated with the Votes only this morning. That is the first opportunity anybody has had of considering its provisions, and I would submit that, with a Bill of its importance and complexity, a longer opportunity should be given to Members to consider its terms before it is put down for Second Reading. I cannot see why so short a time was given in the case of this Bill.

Sir S. Hoare: I am sure it will be the general intention of all Ministers to give Members as long notice as they can, but we must remember that we are at war. Some of these Bills are urgent, and this particular Bill is a matter of great urgency.

Mr. Lewis: This Bill may be a matter or urgency, but it was obvious to the Chancellor of the Exchequer that he would have to bring it forward from the moment the war started. I do not see any reason why it should have been circulated only this morning when we have to discuss it this afternoon.

Mr. Herbert Morrison: Is it not the case that although these Bills may be urgent, the short time available between a Bill coming before the House and its discussion is due to the slow moving character of Ministers?
Resolved,
That this House, at its rising this day, do adjourn till Tuesday next."—[Sir Samuel Hoare.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

Prices of Goods Bill, with Amendments.

That they have passed a Bill, intituled, "An Act to make provision for promoting economy and efficiency in the carrying on under war conditions of the work of certain chartered and other bodies not being local authorities; for enabling certain Universities and colleges to adapt themselves to war conditions; and for purposes connected with the matters aforesaid." [Chartered and Other Bodies (Temporary Provisions) Bill [Lords.]

CHARTERED AND OTHER BODIES (TEMPORARY PROVISIONS)

BILL [Lords.]Read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 285.]

PRICES OF GOODS BILL.

Lords Amendments to be considered upon Tuesday next, and to be printed. [Bill 286.]

Orders of the Day — NATIONAL LOANS BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time." —[Captain Crookshank.]

4.0 p.m.

Mr. Dalton: My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) on Tuesday made an exceptionally interesting speech on the Financial Resolution and covered all the ground so far as controversy may exist on matters covered by this Bill. I do not propose this afternoon to go over so large an area of ground, but rather to offer a few observations on certain of the points raised and to go into a little more detail than was then developed. My right hon. Friend the Member for East Edinburgh dwelt with great emphasis on the fundamental importance of securing not only a low rate of interest on any Government loans that may be raised under this Measure, but also upon securing that the rate of interest, in contrast with what happened in the last war, shall fall rather than rise as the war proceeds.
It is perhaps worth while to recall to our attention the very great change that has taken place since the period of the last war regarding the relation of the Government and the Treasury to the money market and the City of London. Without going into great detail I think it may be laid down, and no hon. Member will contradict the statement in this general form, that as compared with the last war the control by the Government and by the Treasury over the Bank of England and over the whole financial machine in the City of London, has developed to a very great extent, indeed to an extent which is very seldom frankly admitted and is not always generally recognised. I think that as between the Treasury and the Bank of England in particular the relationship has been completely revolutionised, and that the Governor of the Bank of England is to a much greater extent than is openly admitted or legally recognised, to-day the agent and servant of the Treasury rather than an independent financial dictator, as

has been the case in the past. Sometimes perhaps the Treasury does not use its power of dictatorship with sufficient ruth-lessness, but none the less the powers are there. And for this reason. I think it will be generally agreed—the financial papers have indeed accepted the position in the last few weeks—that the Government has enormous powers so far as the settlement of rates of interest and other terms of borrowing are concerned.
I am going to submit that at the present time the prices at which various Government securities stand are too low and that steps should be taken by the Government in the near future, having regard to the operations contemplated by this Bill, to raise the prices of certain classes of gilt-edged securities so as to lower the yield and enable borrowing to proceed on more advantageous terms from the point of view of the Government and the community. It is, of course, long since established that what are called open market operations can have a very great effect indeed upon the level of gilt-edged prices; and I hope that the Government, which I think has been encouraging some open market operations, in the form of purchases by the Bank of England of Government securities in the last few weeks—probably such rise in prices as has taken place is largely to be explained by such purchases by the Bank —I hope that the Government and other agencies under Government control will pursue that policy vigorously in the next few weeks and months, particularly in the next few weeks, so as to lift the level of gilt-edged prices above what they have now reached. 
We on this side of the House regret the vast scale on which borrowing must now take place. At an earlier stage in this year's financial discussions we made certain proposals which were not accepted. They were designed to reduce the amount of new borrowing required and to substitute therefor a special annual tax on capital. I am not going to re-debate that now, but since it was rejected we are now committed to a very much larger volume of borrowing than would have been necessary if our proposals had been accepted. Given this very large necessary borrowing to finance the war, it is clear, I think, that there will be a considerable expansion in bank credits. Indeed, an authority in the City of London whose opinion I asked on the


matter said he thought it would be well within the mark to say that during the first 12 months of hostilities Bank credits would be expanded, by reason of the Government borrowings, by more than £250,000,000, and later on, in the further stages of the war, by even greater quantities. A very large expansion will undoubtedly take place in Bank credits, and we shall therefore have a situation in which the banks will be, to use a common phrase, creating new money on which the Government will be paying them interest. 
Much might be said on the point of principle in objection to such a situation —that privately-owned institutions, paying high dividends to shareholders, should be enabled by this Government policy to create, free of charge to themselves, large quantities of new money on which they receive interest from the Government, itself responsible for the financial operation. In principle such arrangements are objectionable. But this is not the time to develop that argument at length. I merely wish to say that, in so far as the banks are going to benefit largely by reason of the mode of finance adopted by the Government, I hope that the Government will consider the propriety of, in some way or another, fixing the net profits of the banks, putting them as it were in the same position as the railways taken over by the Government, and not permitting them to go above a certain standard income," and in the second place, as the banks themselves and other financial houses will be subscribing on a considerable scale to the loans proposed to be floated, that is another reason why the rate of interest should be kept at the lowest possible point. In the Debate on the Financial Resolution on Tuesday the Chancellor of the Exchequer said:
It is obviously not in the public interest that the terms of a future loan should be the subject of debate and discussion before the issue is made."—[OFFICIAL REPORT, 7th November, 1939; col. 94, Vol. 353.]
In a certain sense that may be true, but in another sense I think it is profoundly untrue. It is of very great importance that Members in all parts of the House should express their view before the form of the issue is determined upon, in the hope of influencing the decision of the Government regarding the terms of the issue to be made. This is a moment when debate can do no harm and may do

much good I therefore wish for a moment or two to make reference to various classes of Government securities, to comment upon the yield and to offer some suggestions as to the method by which, in the very near future, the Government can most advantageously in the public interest issue new loans to the public.
The yield on long-term Government securities is still disappointingly high. Taking the figures of yesterday's quotations given in the Press to-day I will refer to two typical long-term issues, the 3½ per cent. Conversion Loan and the 4 per cent. Funding Loan of i960 to 1990. Both stand at figures which give a yield of about 3¾ per cent. and I suggest that it would be quite outrageous if the Government at this stage were to issue a new long-term loan carrying a yield of 3¾ per cent. I trust, therefore, that so long as the prices of the long-dated securities stand approximately where they do the Government will not make any attempt to issue a new long-dated loan. It would be most extravagant to the State. Nor is it, of course, the only alternative open to the Government. If on the other hand we take a relatively short-term issue, for instance the National Defence Bonds of 2½ per cent. of 1944–48, these stand at round about 98 and they yield therefore round about 2¾ per cent., a much more satisfactory figure from the point of view of yield. That is due to obvious causes, the assurance against capital depreciation in the near future and so on. 
But it appears to me that here we have an indication of the type of issue on which the Government may for the moment concentrate a large part of their attention. If the Government were to issue a short-term bond, say five to eight years, I think it could within a few weeks, if it applied some Bank of England purchases and other open market operations to these classes of securities on the Stock Exchange, get the yield on such short-term bonds down to 2½ per cent. It is by no means out of reach to get down to 2½ per cent. and to get ¼per cent. off in the next few weeks, and at the end of the month to issue short-term bonds at 2½per cent. at par. I hope that the Government will not issue any securities in the near future at a substantial discount, which would be only deceiving the public and storing up additional charges later on. I suggest


that 2½ per cent. at par is realisable for a short-term issue within the next few weeks. 
The Government are planning for a war of three years, and in five, six or seven years' time we shall be in a war aftermath, which no doubt will present many difficult problems. To whatever else we look in that future there should surely be no doubt at all about a policy of cheap money being pursued with even greater rigor than it was before the war. In the aftermath of war, when all will be impoverished, one of the most intolerable positions would be that moneylenders should be allowed to raise their prices compared with what they have charged for money in the near past. Therefore, if we may assume that in the aftermath of war there will still be a deliberately contrived cheap money system, there is no reason to fear the possibility of converting these bonds, when they mature, on at any rate equivalent terms, and thereby removing the chief argument against short-term bonds, namely, that conditions may have moved adversely to the borrower and that a new loan may have to be raised on more disadvantageous terms. 
Therefore, I hope the Government will, in the first instance, concentrate upon a short-term issue, postponing any idea of a long-term issue until steps have been taken to reduce quite substantially the present high yields which I have quoted, on Government securities running for 20 or more years before maturity. The present yield is about 3¾ per cent. on Government long-term stocks, and I think it would not be regarded as a fair apportionment of sacrifices between the different sections of the community if on a gilt-edged long-term British Government investment those who had lent the money were to get more than 3 per cent. in this time of trouble. I say "not more than 3 per cent."; perhaps it should be not more than 2½per cent.
Therefore, we set the Government initially the task of reducing the yield on long-term securities by appropriate means, some of which I have hinted at, from something in the neighbourhood of 3¾ per cent. to something certainly not above 3 per cent., and preferably even lower. Until that has been done I think it would be a grave miscalculation for the Government to embark upon any long-term issue, including, as I have already suggested, what I may call a camouflaged

long-term issue in which the stock being issued at a substantial discount, the realities of the situation were concealed from inexpert eyes. All I wish to say further on this matter is that, since we are confronted with a position in which there is a need for very large new borrowing powers by the Government in order to finance the war, I think that it is proper to ask that the Government shall do their best to accustom the public, particularly those sections who are able to subscribe to loans, to new standards of cheap money. At a time like this it is important that public opinion should not attach even the suspicion of profiteering to these financial transactions and rates of interest, which in the light of past experience may seem to the City of London to be very modest but may none the less appear to be extortionate to a wider public. 
I have particularly concentrated on this one matter of the rates of interest and the terms of the loans to be issued under this Bill. The Bill itself is largely technical and does not lend itself over-much to debate. At any rate, I have not found in it any matters particularly worthy of further comment beyond what was said on Tuesday last. But the terms of the Bill do not give us any indication of the terms of the issues to be made by the Government under the authority of the Bill. It is upon that matter that I have concentrated my observations, and in view of the fact that the Chancellor of the Exchequer said very little on Tuesday in reply to the speeches from all parts of the House on this subject I hope that the Financial Secretary to the Treasury will, although we are not asking him for advance information as to the terms of the loans, feel able to give some rather more definite assurance that the Government is fully alive to the arguments which have been put forward not only by my right hon. Friend the Member for East Edinburgh and other hon. Members on these benches but also by some of his own supporters who follow these financial problems.

4.20 p.m.

Mr. Boothby: I do not intend to make a speech but I should like to say one word in endorsement of the speech of the hon. Member for Bishop Auckland (Mr. Dalton). I think it is the feeling among all parties in the House and among the community as a whole that one thing


which we must avoid under this Bill is saddling posterity with too great a burden of interest. I think that is the united opinion of everybody, and while the hon. Gentleman went a little far perhaps in his suggestions—although one hon. Member sitting behind him evidently had the view that he did not go far enough—we are absolutely united on the general principle that in order to finance this war the Government must borrow at the minimum possible rate of interest, and that until and unless they can get Government long-term securities up to a point where they can borrow at a rate of interest, I should say, under 3 per cent., it would be very much, better for them to continue to finance this war upon a short-term basis. That is the short but fundamental issue. I think I am expressing the opinion of many Members on this side of the House and of the country, and would endorse the arguments just addressed to my right hon. and gallant Friend by the present leader of the Opposition.

4.22 p.m.

Mr. John Wilmot: Nothing is more noticeable and more salutary in the discussions on the many-sided aspects of the war which we are having from day to day than the fact that on all sides of the House there is a determination to learn the lessons of the last war, and, as has been said by my hon. Friend the Member for Bishop Auckland (Mr. Dalton), no lesson is more important than the necessity of holding down the rates of interest for Government borrowing, not only because that will effect tremendous economy, but because of the far-reaching effects in every branch of national enterprise. As Mr. Keynes pointed out in a letter to the "Times" a little while ago, the saving to the nation of borrowing at, say, 3 Per cent. instead of 4 per cent., or 2½per cent. instead of 3 per cent., would be of tremendous magnitude. According to the figures which Mr. Keynes brought forward, the saving by borrowing at 2½per cent. instead of 3 per cent., on the scale of borrowing which we are contemplating, would be equal to twice as much as the yield of all the new taxes which have been imposed. It becomes clear, therefore, that it is much less disturbing and will create far less hardship to economise on the rate of interest than to seek to raise further revenue

with which to meet a higher rate of interest. 
Since the last war, as my hon. Friend has pointed out, a very important new mechanism of Government and public control of the financial machine has been devised. To quote an eminent authority who was writing the other day in the "Financial News," the Government can, in fact, now make the rate of interest what it likes. The writer said:
There is still time for the Government to make up its mind to use its control of the entire capital market and of the credit system in order to put the rate of interest exactly where it wants it to be.
The Government has complete control of all the mechanism necessary to fix the rate of interest at a given point and to keep it there. It has already taken the most important preliminary step. It is in complete control of the foreign exchanges and has completely closed the monetary system round this island. It needs, of course, the co-operation of the banks, and although there seems to be a peculiar and entirely unnecessary reticence about the matter, I understand that there has been set up in the Clearing Bankers' Committee what is, in effect, Government control, willingly acquiesced in by the banks themselves, of the banking institutions. Accordingly, the banks are cooperating with the Government. The Bank Rate has already been reduced by I per cent., and many believe that it should never have been raised. The Chancellor of the Exchequer seems to disown any share of the credit for its reduction but I find it very difficult to believe that the Government itself is not at this time really in command of the mechanism to fix the Bank Rate. I would suggest that these controls should now be used to reduce the Bank Rate to I per cent., and that the control over the clearing banks be exercised to take the next step, namely, the limitation of bankers' advances, in order to check that form of inflation and its effect on the rate of interest.
Further, I would suggest for the consideration of the right hon. and gallant Gentleman that it would be proper severely to limit the rate of interest on bankers' deposits, in fact, that it would be a wise step completely to eliminate payment of interest on deposits with banks, and allow those funds to flow into


Government loans when the time comes. With these steps should be coupled a cooperation with the banks to limit the price they are prepared to pay for Treasury Bills. Circumstances may arise in which the banks will be rather inclined to bid up the price of Treasury Bills. A control by means of the Clearing Bankers Committee could be used to put a top to the price to be bid for Treasury Bills. That would be a most important step in holding down the short-term rate as a preliminary to holding down the rate for the long-term issues which will have to come. I suggest with all respect that 2 per cent. should be the maximum rate paid during the war for short-term money and that a maximum of 2½per cent. should be put to long-term money.
There would be very great advantages if the Government came forward openly at this stage with these plans of financial control. The nation is in a mood to cooperate to the full in this kind of control in order to prevent usury arising from the war. and it seems to me that no good purpose is served by maintaining the old-fashioned atmosphere of hoodoo and mysticism around these operations. If the Government issued an authoritative statement that 2 per cent. for short-term money and 2½per cent. for long-term money would be the highest rates of interest which would be paid for any Government borrowing, that action, with the steps which I have ventured to suggest must accompany it, would enable us to avoid all the errors which we made in the financial field in the last war.

4.30 p.m.

Mr. Benson: All sides of the House are fully agreed that the rates of interest at which the Government must borrow must be very different from those at which Government loans were borrowed during the last war. We may fix in our minds an ideal of 2 per cent., 2½ per cent., or 3 per cent., but whatever the ultimate figure arrived at by the Government may be, it is certain that the House will insist upon that figure being very moderate. My hon. Friend has just pointed out the enormous difference of the burden between borrowing at 2 per cent. and 3 per cent. We must cut down rates of interest, but let us remember that, if we allow a 25 per cent. rise in prices, that is equivalent to paying 25 per cent. more

for our money in the market. It does not matter whether you borrow £100 at 3 per cent. or £125 at 2¾ per cent.; the amounts are practically the same.
We have to guard against the danger of inflation. There is a possibility of our running that risk by attempting to rig the money market for the purpose of obtaining cheap rates of money. My hon. Friend the Member for Bishop Auckland (Mr. Dalton) has suggested that there has been a certain amount of open market operations in the past and he hoped that they would be pursued vigorously. He pointed out that the Bank of England had been buying Government securities, and that that was one of the main reasons for the recovery in prices. The effect of open market operations of that kind is to throw a very large amount of money into the hands of the banks, and that allows a very large credit expansion. Though it might be necessary that there should be some expansion of bank credits in order that the loans might be financed, there is a possibility of going too far in expanding bank credits. The only sound form of borrowing is that which absorbs actual savings, or which deflects to the Government the general volume of credit on which our industrial system at the present moment runs.
When the Government absorb savings and take larger than the normal share of bank credits, we get no inflationary effect, but if the Governments borrowing comes out of freshly-created money, which can be easily done as a result of flooding the banks with money as a consequence of open-market operations, there is a great possibility that we shall get inflation and a rise in prices. Although we may get loans borrowed at a low nominal rate, we may have to borrow considerably more money on account of the rise in prices of the commodities which the Government have to buy. We should not look at this matter merely as one of low rates of interest. We have to look at it through the dual spectacles of keeping interest rates low and, at the same time, keeping prices low. We cannot do that if we allow borrowing to come, as it did in the last war, almost entirely out of bank-created credits.
I notice in the Bill a reference to foreign loans. I suppose it is inevitable that we should have to raise foreign loans


where we can. Certainly, Government purchases abroad will be enormously high. In the last war our imports jumped up by leaps and bounds. The visible adverse balance in 1913 was approximately £134,000,000; the visible adverse balance in 1918 was over £700,000,000, a difference almost entirely due to Government purchases. Our imports doubled in value during the last war, but our exports remained stationary. We must not allow that to happen again. Every step must be taken to see that our imports are paid for by exports.
Many things have happened in the last 20 years. We have evolved an entirely new system of banking. Other countries have also been active. Germany has evolved an entirely new system of overseas trading, by bulk barter. There is no reason why we should not adopt it. We have already adopted it in regard to two countries. We have arranged to exchange American cotton against Empire rubber, and negotiations are already going on, I believe—

Mr. Speaker: That is hardly relevant matter to the Second Reading of this Bill. There is nothing in the Bill about international exchange of commodities.

Mr. Benson: Perhaps I am getting rather wide of the mark, but as the Bill contemplates the raising of foreign loans I suggest that we must realise the importance of maintaining our balance of trade. I leave that. We have always to watch the dual point, that we must borrow at low rates of interest and that our financial manipulations must not overshoot the mark and allow inflation and rise of prices.

4.37 p.m.

The Financial Secretary to the Treasury (Captain Crookshank): The House will, no doubt, be willing to let us have this Bill now, as there is other business to come before us. I must first apologise to the House on account of the view taken by my hon. Friend the Member for Colchester (Mr. Lewis) that the Bill has been rushed upon it. We did have a Debate on Tuesday, and an opportunity for Debate yesterday. Moreover, this is very little more than a formal stage, being the introduction of a machinery Bill.

Mr. Dalton: This is the first time that we have had the Bill.

Captain Crookshank: Yes, but it deals only with machinery and is, we think, adequate for that purpose. It is not a policy Bill. It is concerned with the taking of powers by the Government, and not with the exercise of the powers that have been granted by this House. It is a description of what powers are necessary as a result of bringing up to date, in a modern Bill, powers which, as I explained the other day, are now scattered about in a whole lot of statutes.

Mr. Wilmot: May I point out to the Minister that the next time we consider this matter the loans will have been made and then it will be too late for this House to express its view on policy?

Captain Crookshank: Oh, yes, I am not taking any exception to what has been said, and if anybody thinks that this stage comes too soon after our discussion on Tuesday, I am sorry. Of course, we had to get on with this business, and there will be the subsequent stages in the middle of next week, by which time hon. Members will have studied the Bill in greater detail than they have had a chance to do to-day. Hon. Members will not expect me to say anything this afternoon, and I do not think they will be disappointed at that. When winding up the Debate on Tuesday my right hon. Friend said:
It is equally clear that I cannot say anything about it, because if I uttered a single phrase, who knows what inferences might not be drawn and what consequences might not ensue?"—[OFFICIAL REPORT, 7th Novembet, 1939; col. 143, Vol 353.]
Where so cautious a man as the Chancellor of the Exchequer feels that he cannot venture, the poor Financial Secretary to the Treasury has to be like "Brer Rabbit" and say nothing at all.
To those hon. Members who seemed to take exception to what the Chancellor of the Exchequer said, to the effect that it was desirable that there should be no discussion during the Debate, I would suggest that what he probably had in mind was that it takes two to make a discussion, and that while it might be useful for the House for their part to express their private opinions it would be very wrong for him as Chancellor of the Exchequer to give any replies on points which were raised on such matters as the rates of interest at which loans might be raised and so forth. The House as a


whole may be assured by the statement which my right hon. Friend did make in the concluding sentences of his speech on Tuesday when he said:
I shall consider carefully everything that has been advanced in the Debate."—[OFFICIAL REFORT, 7th November, 1939; col. 145, Vol. 353.]
I would add that that assurance extends to the speeches which have been made by hon. Gentlemen this afternoon. To-day's business is in effect only a continuation of the discussion that we have already had. If any information is desired on the Committee stage as to the details of the actual machinery, my right hon. Friend or I will, of course, be only too happy to assist hon. Members in regard to it. I do not think there is any need to go into detail as regards the machinery, in the Bill as it stands this afternoon, so I would ask hon. Members to let us have the Bill now.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House, for Tuesday next.

Orders of the Day — RESTRICTION OF ADVERTISEMENT (WAR RISKS INSURANCE) BILL.

Order for Second Reading read.

4.41 p.m.

The President of the Board of Trade (Mr. Oliver Stanley): I beg to move, "That the Bill be now read a Second time."
In asking the House to agree to the Second Reading of this short and simple Bill to deal with a rather specialised point, I do not know that it is necessary to take the House at any great length over what I may call the background to the Measure. Hon. Members will recollect that, as far back as April, 1937, the Government announced that, in their view, the indemnification of property against war risks was not a fit subject for insurance. They based that announcement on the fact that the extent of the risk was so incalculable and might in certain circumstances be so great that no actuarial basis existed for making a real insurance scheme.
Therefore, the Government announced that, while they could not themselves put forward any scheme for insurance,

they would consider a scheme for compensation for damage of this nature. That announcement caused a considerable amount of disappointment among those who were owners of property. It was natural for all who owned houses to think that, for a small premium—that is always the bait held out—it would be possible to get full indemnity for loss or damage to their property which means so much to them. As a result, therefore, there was a fruitful field for an appeal by companies and individuals who claimed to be able to do, with their rather limited resources, that which the Government, with the whole resources of the State behind them, had declared it was impossible to do.
At various times since April, 1937, there have, therefore, been started various companies on a basis of mutual enterprise, which claimed to give to subscribers protection against war risks to their property. I want to make it clear that there is no accusation that those enterprises are fraudulent in themselves or are fraudulently conducted; but there is an allegation that in fact they give very little protection indeed to those who take advantage of the terms which are offered to them. Even so, it would not necessarily be for this House to interfere. It is for the individual to judge for himself whether the protection he gets is worth what he pays or whether it is not. What has troubled hon. Members and has troubled a number of people outside is whether the people who are asked to, and who do, subscribe to those enterprises understand how little protection, in fact, they are being offered under those schemes.
The first difficulty that strikes one about these schemes is the question of the rate of premium which is to be charged. Hon. Members know that in the war risks insurance scheme for commodities the Government fixed the rate of premiums in the initial period at a rate as high as 6 per cent. In explaining that figure in the House at a subsequent date I told hon. Members that although there were naturally no data on which to go and every calculation must be based on a certain assumption, yet if we take the assumption given to us by those best qualified to judge and by those most knowledgeable of the possibilities of aerial attack in the conditions of to-day, it was


such that any premium less than 6 per cent. might be much lower than was justifiable in relation to the possible rate of damage which would be incurred. In the uncertainty which surrounds the whole of this problem of aerial attack, no one suggests that the Government's assumption is necessarily right and that every other assumption or guess is necessarily and inevitably wrong, but the Government's assumption is taken in the light of experience of those who know most about the possibility of aerial damage and bombardment, and it is, therefore, something which must be closely considered and must be taken by anyone dealing with this problem as something not lightly to be cast aside.
Yet when you have the Government charging a rate of 6 per cent. per annum, what is the rate which these companies charge and which they lead the subscribers to believe is going to provide for them some adequate measure of protection? In some cases the rate that they have been charging in peace time has been as low as 2s. per cent.—just about the rate of an ordinary fire insurance premium in a company which has been in existence for years, with an immense accumulated reserve to meet any sudden emergency. The highest rate of which I ever heard was only 15s. per cent., and even now that the war has started, when some of the particularly low peace-time rates have been increased, most of them now range between 5s. and 7s. 6d. per cent. The difference between that and the Government's estimate, not of what is bound to happen but what may happen, is so staggering that it should be brought to the notice of those who subscribe to schemes of this character.
The second thing which one feels may not be fully understood by the subscriber to these schemes is the limitation of liability. The compensation at the end of the war is to be limited to the Government's ability to pay. These schemes which are offered to the public as something so much better than that which the Government will give them for nothing have exactly the same liability. Except in one instance, there is only a promise to pay at the end of the war and in every instance the amount which is to be paid out bears no relation to the actual amount of damage suffered by the individual. It

is limited by the amount which happens to be in the fund at the time that the war comes to an end. It is true that in every prospectus which I have seen that fact has been stated, but it has not always been stated very clearly. Most of these communications appear partly in big type, and partly in small type, and I notice that almost invariably in the large type you get a vague general statement which gives an optimistic feeling of security to lead people who read no further to believe that they are getting full and complete cover for the goods which they are insuring, while the sordid but necessary details as to the fact that the money is not paid out until after the war, that the payments are of course limited to the amounts which are then in the fund, and also the fact which appears in many of these documents that the valuation is entirely within the discretion of the board of directors and that it cannot be challenged, appear later on in very much smaller print.
One wonders how far the people who read these documents and subscribe on the strength of them have quite understood what they are supposed to mean. Not every member of the public scrutinises a document of that character with the same care that we scrutinise Acts of Parliament. Obviously, they should do so when dealing with something which purports to concern insurance, even though it is described as mutual insurance. The public has become used to the word "insuring." In ordinary life when we talk about insuring something we have in mind the fact that we shall pay a premium, and usually a very small premium, and we are in the habit of thinking that in the payment of this small premium we shall get complete and immediate compensation for whatever loss we shall suffer. I wonder how many who have subscribed to some of these companies realise what a gap there is between what all of us ordinarily think of as insurance and this mutual system which is here referred to.
Of all the companies which are now in existence only one has yet completed the statutory period which has made necessary the issue of a balance sheet. How many of the subscribers to that company have quite realised the implication of that one balance sheet that has been published? It is true it was only up to


the end of 1938, but that balance sheet shows during that year the society had received in subscriptions £30,000 and the rate of premium that they were charging at that time varied between 2s. and 2s. 6d. per cent. Hon. Members will see that on that basis subscriptions at £30,000 in the year should mean property covered to the extent of something like £25,000,000. At the end of the year after payment of expenses and other matters there was just over £25,000 in the fund from which compensation was to be paid on property valued at £25,000,000.

Mr. MacLaren: Who are the directors?

Mr. Stanley: Of course, another year has gone by since then and they may have doubled the premium interest and it may be £40,000 instead of £20,000, but whether it is £20,000 or £40,000 it is the damage which one bomb may do to one building that matters, and that is the fund out of which protection is to be given upon £25,000,000 worth of property. I am not saying that a subscriber to that society will necessarily lose his money. Even if the distribution of the £20,000 is over so wide an area of property that each subscriber receives in respect of damage only £1 or £2 he will have paid only 4s. or 5s. in order to get it and he will not necessarily have lost money, but what one wonders is, does the man who is a member of this society and has paid this premium realise that this is the limit of the protection which he receives, or does he think that he is getting some effective cover for the property which may mean so much to him?
The third point with which I wish to deal is the question of the allocation to reserves, the amount of money which is put into the fund, how the fund is secured from which this compensation is to be paid, and the amount which goes to the expenses of management. It is only fair to say that in some cases perfectly proper provisions are made with regard to a fund which is placed in the hands of reputable trustees and which is clearly as safe as machinery of that kind can make it. It is equally true to say in other cases the arrangements with regard to a scheme of this kind are sketchy in the extreme. The same applies with regard to the question of expenses. In some cases the possible expenses are set out clearly and brought to the attention of the subscriber. In others as much

as 50 per cent. is to be credited to management expenses—50 per cent. of the premiums received, although it is true to say that it is held out that any surplus of this 50 per cent. after the actual expenses have been paid will be added to the fund. In other cases, although it is regarded with pride how small—in fact, I think, how non-existent—are the salaries to be paid, it is stated that all remuneration is to be on the basis of an unspecified commission on turnover.
Several questions were asked me in the House with regard to what we were to do about these companies. I took the opportunity then of warning subscribers as to the dangers of these methods and the necessity for caution in dealing with them, but I deferred any action pending the setting up of the Weir Committee to deal with the whole question of insurance of property of this nature, possibly with the help of the Government, because it was clear that the findings of that committee would necessarily have a bearing upon the future of these companies. We have now had the report of the committee, and as far as the wide question with which it was set up to deal was concerned that clearly is not a matter for debate upon this Bill, but incidentally in their report they refer specifically to the kind of thing with which this Bill is intended to deal. On page 12 of their report they say that they have considered this particular problem and that they have heard evidence about it. If I may quote some of the words:
While we do not suggest that there is any intention to induce the public by misrepresentation to subscribe to these schemes, we are of opinion that many of the appeals made to the public on behalf of the promoters are put in such a form as in fact to mislead the public into thinking that a substantial element of cover against the risk of damage is offered to them.
They go on to say that they have received very strong representations against these bodies, and they recommend that some action should be taken to deal with them. There is a passage in which they deal with the remedy:
We recommend, therefore, that the appropriate Government Department should consider the most suitable method of curtailing the public activities of the sponsors of such schemes by prohibiting circularisation of the general public in the form of prospectuses or advertisements.
They go on to say that they do not


feel competent to recommend in detail the course of action to be pursued, but they are convinced that some such action should be taken. In view not only of past history, but of that report as well, the Government felt it necessary to take some action to deal with what might become a real abuse. The methods of treatment which might be applied to these companies were various. First of all, it was possible to prohibit them completely. That was not recommended by the committee; nor, I think, would it be justified. As long as people realise that all they are doing when they subscribe to these companies is gambling on the fact that it will be the houses outside the scheme that will be destroyed, and not the houses inside the scheme, no great harm will be done.
In the second place, certain cases have been brought to my notice where this kind of mutual insurance is quite justified, and, in fact, I think, desirable. There was an instance of a number of owners of small yachts, some laid up in ports all around the country, with varying degrees of risk, widely spread, who, for a fairly substantial premium—much more substantial than any charged by these companies—were considering a scheme. That sort of scheme might be not only justifiable, but of great advantage. Therefore, it became clear that the right way was not prohibition of circularisation, but control of circularisation, making quite sure that when the public subscribe they know what they are subscribing to. If, knowing the degree of protection they are getting, they still wish to subscribe, it is not in the public interest that they should not be allowed to do so. Therefore, the Bill proceeds on the simple plan of controlling the issue of prospectuses and advertisements by companies desiring to take part in activities of this kind.
Clause 1 sets out the things which it is forbidden to do except with the permission of the Board of Trade. The wording of that Clause is taken almost exactly from the Prevention of Fraud (Investments) Act, which we discussed at some length in the spring. In that Bill there was a similar Clause to prevent the circularisation of appeals for investments except under proper safeguard. Clause 2 gives the Board power, when granting permission for this circularisation, to attach certain

conditions. Those conditions are not limited to the form and matter in which the actual circular or advertisement is to appear, but extend to the way in which the company is carried on. Conditions may be attached, for instance, as to the way the trust fund is to be run and the amount that it is permissible to place to expenses; and they are not confined to saying that the exact way in which the fund is run or the exact amount of expenses paid must appear in the circular. That seems to me to be sensible—that not only should the public have complete disclosure but that we should control the manner in which companies of this kind are run.

Mr. A. V. Alexander: One thing about which we are anxious is the lack of any direct provision for effective control of the whole of the administrative expenses. Does the President of the Board of Trade propose to issue regulations?

Mr. Stanley: What I think would probably be the best machinery for securing this would be, when the advisory committee is set up, to discuss with that committee the sort of uniform standard which ought to be observed, and then to suggest to them that uniform conditions should be attached to all permissions. That, I think, would be a better way than the issue of regulations. In answering that question, I rather anticipated Clause 3, which deals with the setting up of that committee. I think that the Board of Trade would be strengthened by such a committee. I think it should be a small committee. I see no reason why it should be a technical one. It seems more important that it should be guided by common sense, seeing that fair play is done, rather than that it should have great actuarial experience.

Mr. Owen Evans: Is it intended that these conditions should apply to societies or groups already existing?

Mr. Stanley: Yes, if they issue circulars. If a society next year sends out a reminder that subscriptions are due, that, in law, is an appeal for a new contract of insurance, and will bring the society within the scope of this Measure.

Mr. Benson: Assuming that permission is not granted, does that mean that the company will have to be wound up. and that its funds must be distributed among the subscribers?

Mr. Stanley: The company will not have to wind up, but it will not be able to circularise its subscribers any more.

Mr. Benson: What about the funds?

Mr. Stanley: In some cases societies will be able, no doubt, to carry on. In other cases, perhaps, they will prefer to be wound up.

Mr. David Adams: Could mutual associations continue doing business exclusively through their agents?

Mr. Stanley: I think that would be causing circulars to be distributed or giving "information calculated to lead" to such insurance. If the hon. Gentleman cares to develop his point, I will see whether there is a loophole there; and, if so, I will stop it up. But I do not think there is. I was saying that I think the Board of Trade will be very much strengthened by a committee of this sort. I do not want it to be thought that we are trying to stop or handicap these associations just because their view as to the possibility of war risks differs from the Government's view. Although, naturally, our assumptions are probably based on better information than they have got, no one pretends in this uncertain world, and this more uncertain war, that our assumptions are necessarily correct. I should like to have an independent committee without what people might call a Government bias, which will act quite dispassionately towards these societies. If these societies are honestly conducted and provided they set out how much—or, I should say, how little—they propose to do for their members, I do not think the House of Commons can be held responsible for people who still subscribe to them.

5.10 p.m.

Major Milner: The House is obliged to the right hon. Gentleman for the full information he has given, and, in particular, for the very ample warning he has issued in regard to the possibilities of some of the societies he has mentioned. But it is rather a pity that he did not discriminate between those societies and the good societies, carrying on a legitimate business, who have not indulged in any of the activities of small-print advertising; and that he should have laid himself open to the charge that he has put both sorts of societies in the same box.
As I understand, some societies are carrying on a perfectly legitimate business. The risks have been made clear to their subscribers, the protection is adequate and the criticisms that the right hon. Gentleman has expressed do not apply. However that may be, it is quite clear that the Government attach considerable importance to this question of war risks in regard to real property. Their conclusions, as set out by the Chancellor of the Exchequer and the right hon. Gentleman, were substantially supported by the report of the Weir Committee.
While I make no reflection whatever— far from it—on the distinguished persons who constituted that committee, I am bound to say that I do not consider a committee of bankers, industrialists and representatives of the large insurance companies the appropriate, or best, form of committee to decide a matter of this sort. The ownership of real property in this country is very widely spread. I might almost paraphrase a famous saying, and remark that we are all property owners now. Therefore, I regret that the committee was not more widely constituted, and that representatives of small property owners, and those associated with them, were not included. There is no doubt that, because the Government could not themselves assume any responsibility for the insurance of real property, the value of property has been reduced, the difficulties connected with the acquisition or selling of property have been increased, and the small property owners have been left largely unsatisfied by the report of the committee and the Governments acquiescence therein. The conclusions of the committee and of the Government are not, I think, in all cases accurate. The right hon. Gentleman, for example, spoke more than once this afternoon about the inadequacy of the sums available in the case of mutual societies. That is a little difficult to understand when I read—perhaps the right hon. Gentleman will correct me if I am wrong— that one mutual association, which I believe is the oldest, and possibly the largest, has over £200,000 to its credit to-day. That is a much better instance than that which the right hon. Gentleman gave, of an association which had only £20,000 or £30,000 to its credit.

Mr. Stanley: Which society is that?

Major Milner: The society promoted by the Property Owners' Association—the Property Owners' War Risks Mutual Society, Limited. That £200,000 might, without any increase in subscriptions, be increased to £600,000 or £700,000 if the war lasts the three years that the Government expect.

Mr. Stanley: What is the amount of property owned by the company?

Major Milner: I cannot calculate that for the right hon. Gentleman; but I am sure that his officials could give him the information. With respect to the right hon. Gentleman, I am suggesting that a sum of £600,000 or £700,000 would have been of considerable help to the Government if they themselves had assumed, as they professed to have assumed, some responsibility in regard to real property. The Government have given the impression that the whole thing is really quite fair, and that for the future they are assuming some responsibility with regard to real property. I suggest that whatever that responsibility may be, they would have been very much helped if thousands, possibly millions, of pounds had been available to help the Government to deal with this problem. By their action the Government have thrown away the whole advantage of these sums.

Mr. Deputy-Speaker (Colonel Clifton Brown): The hon. and gallant Member cannot discuss the Government's war risk policy as a whole.

Major Milner: With respect, the right hon. Gentleman himself has dealt with the question of passing on Government responsibility, and, in particular, has contrasted their action in this matter with their action and the premium they demanded on the question of the insurance of commodities. I am dealing with the objections which the right hon. Gentleman has raised to-day to the inadequacy of the premiums, and I submit that I am perfectly in order in what I said in regard to that matter. It has been said, I think, by the Weir Committee that the contributions made by property owners would constitute a justifiable earmarking of national assets for one purpose alone. It seems to have been overlooked by the Government and by the Committee that property owners are still liable to make the

same contribution as any other class of the community to the general taxation. Why, therefore, if they are willing, should they not make some mutual provision among themselves? The right hon. Gentleman spoke of the Commodities Insurance Scheme in which the Government are charging a premium of 6 per cent. It seems to be quite inconsistent that the Government should accept a premium and insure commodities and yet fail to insure the buildings in which those commodities are stored.

Mr. Stanley: On a point of Order. Will my hon. and gallant Friend have an opportunity of replying if the whole of the Weir Committee's Report is to be discussed?

Mr. Deputy-Speaker: The report of the Weir Committee as a whole is not concerned with this Bill, but the Bill deals with a recommendation of the Weir Committee in paragraph 14, and we cannot discuss in detail the rest of the report.

Major Milner: With respect, the Weir Committee give certain reasons for the decisions and recommendations they make. The right hon. Gentleman has also advanced various reasons, and I am pointing out the inconsistency of the Government in insuring commodities and of starting schemes for the insurance of commodities and failing to support a scheme for the insurance of the buildings in which those commodities are stored. As the Government have taken that decision, we must, of course, accept it, and must therefore agree that the societies which carry on these mutual associations should be regulated, but I cannot help feeling that a very serious disservice has been done by the Government in not accepting the greater responsibility. Had they done so, confidence would have been increased, values would have been steadied, and that help would have been most useful to the building and ancillary trades and to the small property owners, and, as I have already indicated to the right hon. Gentleman, the State would have been many hundred of thousands of pounds, probably millions of pounds better off.
The Government, having decided not to have such a scheme, contributory or otherwise, we have this Bill before us today. We on these benches agree that whatever may be the result of other forms


of control in which the Government have indulged, at any rate there is a case for some control of these societies. There is no question, as the right hon. Gentleman said, that some societies give in their advertisement the idea that their schemes provide indemnity or compensation, and many people may be misled into believing that it would be indemnity or compensation in full. I have before me the advertisement of one society called the Independent Mutual War Damage Indemnity Trust which contains a good deal of small print relating to the matter of which the right hon. Gentleman spoke. Incidentally that society uses the word "indemnity," and I understand that the right hon. Gentleman's department has some responsibility in that matter. It has to approve of the title of limited companies, and I understand that, although it expressed the view that the word "indemnity" should not be included in the name of another proposed mutual company, yet the department agreed to the word being used in this particular case.

Mr. Stanley: What is that company?

Major Milner: I will hand this over to the right hon. Gentleman as I do not want to give more publicity than is really necessary. The point I am making is that the Department of the right hon. Gentleman has some responsibility in this matter. While it expressed the view in one instance that the word "indemnity" was not desirable, yet it gave consent to another company to use that word in its advertisement. If the right hon. Gentleman will look at the advertisement he will see that the word "indemnity" is used there, and that it may conceivably mislead. I have had handed to me only today a very misleading advertisement of another association called the Mutual Fund, Limited, which speaks of a war damage compensation fund for property and effects. Here again, in my view, the advertisement is quite misleading, and there is justification in that case for the introduction of this particular Bill. Therefore, we on these benches would say that the need for the Bill is established.
The right hon. Gentleman referred to the proposal in the Bill that he would be assisted by an advisory committee, and that, I think, is very desirable. That committee should be of the widest possible character. It should include representa-

tives of small property owners in particular, because there are obvious and clear distinctions between some of the schemes which are at present before the public. Some of them are selective. That is to say, they select the property they propose to include in their scheme. They are purely mutual and insist on the property owner putting in all his properties or none, and do not, as in some societies, allow him to put in properties in the more dangerous areas. As the right hon. Gentleman pointed out, there are societies or companies whose expenses are reduced to a minimum, some of the expenses being found from other sources, while there are other societies which charge registration and management fees and pay substantial directors and trustee fees. Therefore, the closest investigation is desirable, and I hope that the right hon. Gentleman will utilise his committee and officials to discriminate between good and bad societies, so that if he agrees to give a licence to a company to carry on this business the public can be assured that within the limits of the mutual scheme they will be protected.
We commend this Bill to the House and express the hope that the mutual or co-operative principle may be allowed to operate in this or other spheres in proper cases, and we regret that the Government could not in the national interest themselves undertake a greater responsibility than they have done in this case.

5.27 p.m.

Mr. Owen Evans: I want to say only a few words on behalf of my hon. Friends who sit on the Liberal benches. I do not want to be out of order, but really the genesis of the Bill is the report of the Weir Committee. I think I am right in saying that it embodies the only positive recommendation contained in the report of that committee, and if the Government had not decided to endorse the report of the Weir Committee, there would have been no necessity for this Bill, or at any rate there would have been the necessity for a much wider and more useful Bill than that which we have now before us. There is, no doubt, a strong case for the Bill. Cases have been cited by the hon. and gallant Member above the Gangway. There are many others. This is a growing evil, and it has arisen because of the very wide interest of the general public in property investment. Investment in


property is about the most common form of investment of their savings by ordinary people. There are the owner-occupier, the clerk, and the working man, each of whom buys his house and invests a large portion of his savings in his house, and he does this indirectly through the building society. What is still more important is the indirect interest of the public in real property by reason of the investments of large corporations which virtually represent the savings of the ordinary people of the country. It would be a very serious position for the country if at any time the investments of these insurance companies, which are responsible for these savings, should ever be in jeopardy. There are, undoubtedly, very serious attempts being made to obtain money from the public by reason of the necessity on the part of the public to protect themselves against losses owing to damage to their houses and to their property. I have here copy of an advertisement which has come into my hands, and I find on the front page, in very large print, these words:
To property owners. Why not guard against hostile aircraft risks?
Frankly, I thought at first that that referred to some new design of shelter that might be superior to any of the Anderson shelters, and I thought I had better look at it, to see what kind of shelter it was. On looking inside, I found that it was quite a different thing. It was a mutual form of insurance to provide a mutual fund out of which some amount might be obtained in respect of damage from aircraft. The words "Why not guard" are significant. The word "guard" is really a misleading word. It implies that the provisions made by this group of people will be an ample guard to protect anybody against damage to their property. When we talk about ordinary guards, such as a guard round a fireplace, we know that we must provide a guard high enough and substantial enough to prevent the children from falling into the fire. Here is one glaring instance where no indication is given on the front page that there may be only a small amount of money available from the money paid into the fund in order to provide for damage from aircraft. The document states:
In response to a large demand of property owners a mutual fund has been formed.

No one knows where that fund is. No one knows whether it has been formed or not. No one knows where it lies; in whose hands it is held. I notice that the Westminster Bank is cited as bankers for these people, whose names are not mentioned, and whose addresses are not given. A firm of solicitors which I do not know has allowed its name to be included, and there is also an auditor. This is a sort of advertisement which is a mixture of assurance and expression of hope that there will be an ample amount of money available for compensation. One paragraph says:
The damage which would be caused by an air raid would, in these days of modern weapons, be so extensive that it has hitherto been impossible for owners to obtain any cover against risks of this nature. It is anticipated that the response from the property-owning public will be so great that the proceeds will be sufficient to recompense those subscribing owners who might suffer damage.

Mr. Stanley: What is the rate of premium?

Mr. Evans: The rate of premium is a very high one—one shilling per cent. per annum. The advertisement goes on to say:
It is hoped"—
it may be noted that that is just the expression of a hope—
and expected that the fund will become large enough to entirely reinstate, as the chances are that the properties of only a few of the members would be affected. To prevent expensive administration, no cover will be given for the first £5 worth of damage.
The management expenses are set down as 10 per cent. on the total income of the whole of the fund, "after the deduction of proper expenses," but there is no attempt to define what "proper expenses" are. I commend the Bill to the House, and I think the case for it is overwhelming.

5.35 p.m.

Mr. Lewis: The President of the Board of Trade has reminded us that the Government, after giving very careful consideration to the matter, came to a decision some time ago not to promote a scheme of insurance against war risks. I regretted that decision at the time, although I appreciated that the difficulties in the way of any scheme were exceedingly formidable. This afternoon the


President of the Board of Trade comes before us with a Bill the effect of which, if passed, will be that the Government will be in a position, if they so desire, to prevent anybody else from attempting to fill the gap they have left. It is true that the right hon. Gentleman, in his speech, intimated that that was not the intention, and that this Bill is an endeavour to separate the sheep from the goats, to allow the sheep to proceed and to drive the goats away. But when one comes to read the phraseology of the Bill, one must feel that, unless it is sympathetically administered, or unless it is to some extent amended in Committee, it will place almost insuperable difficulties in the way of anybody who does attempt, even partially, to fill the gap.
It is obvious that no man can attempt to frame any estimate of the possible extent of damage to buildings which may be incurred during the course of the war. Therefore, there is no basis for ordinary, commercial insurance principles in this matter. I do not, however, think that it follows that the Government, or if the Government do not feel inclined, the public, should throw up their hands and say, "This is a thing in which we cannot do anything to help ourselves." Although it is true that there is no basis for ordinary, commercial insurance principles here, there is nothing to prevent the widespread use of mutual assurance. Suppose a society were formed, not trading for profit, but for the purpose of enabling property owners to get the benefit of mutual insurance against these risks, with proper trustees and management to look after the property and to manage the business. Suppose it was run on that basis and the premiums were paid. I agree with the President of the Board of Trade that it would have to be a very high premium. I imagine that nothing less than I per cent. would serve the purpose.
Suppose the premium were fixed on this understanding, that if damage was sustained, the effect and the extent of the damage would be recorded, and at the end of the war, if the total amount collected by way of premiums less expenses was sufficient, then the damage that had been incurred could be paid for in full and the balance, if any, could be returned in proportion to the subscribers. On the other hand, if the damage exceeded the fund accumulated, then compensation could be

paid in proportion. There is nothing inherently unsound in such a scheme. On the contrary, if it were developed on a large scale, it seems to me that it might be very effective. In strict theory it is possible that every building in the United Kingdom might be destroyed by the end of the war, but nobody assumes that that is probable, and if a large number, a widespread number, of property owners came into a mutual scheme of this kind, it seems to me that they would get very considerable protection thereby. 
The Government have taken the view that it is better, so far as they are concerned, to make a necessarily vague promise of a method of compensation after the war. The fault of that is twofold. It may involve a very heavy charge on public funds, and at the same time it fails in its principal object, which is to give confidence to the property owners, and as a consequence the building trade—

Mr. Deputy-Speaker: On this Bill the general policy of the Government on war risks insurance should not be discussed.

Mr, Lewis: I am sorry. I only wanted to mention that point. The Bill seeks to restrict efforts on the part of private persons and companies to fill the gap left. No doubt a strong case can be made out for regulation, which will enable the Board of Trade to prevent fraudulent or misleading statements being made to people who are induced to part with their money, but, as I have endeavoured to indicate, there is still the possibility of mutual action on the part of property owners to provide protection which would not be open to those objections. There is a grave risk that any such efforts will be prevented by this Bill. If we look at Subsection (3) of Clause 3—I do not know whether I have interpreted the meaning of that Sub-section aright, but it says:
The committee shall not recommend the granting of any such permission as aforesaid unless, having regard to all relevant circumstances, and, in particular, to the nature and situation of the property.
and so on. It would appear from those words that if anybody endeavours to run a scheme of mutual insurance against war risks, whenever anybody comes forward and says that he wants to insure his house, the association will have to go to the Advisory Committee and say, "Please, is this property of such a nature


and situation that we might include it in our scheme?" If that be the true meaning of the Sub-section, it would make such business utterly impossible. Perhaps whoever replies for the Government will say whether I am in error in assuming that to be the true reading. I have no doubt that such is not the intention of the Government, and if the wording is wrong, perhaps they will be willing to consider it. My point is that there is the possibility of property owners, as time goes on, finding ways and means to protect themselves in this matter, and it is most desirable that nothing should be done to prevent such an effort on the part of property owners. If this Bill be passed, I hope the President of the Board of Trade will bear these points in mind in administration and that such action as I have suggested on the part of property owners, which is of a highly desirable character, may still be possible.

5.43 p.m.

Mr. Garro Jones: I certainly do not desire to withhold from the right hon. Gentleman a measure of credit for bringing forward this Bill, although in proportion and scope it is obviously not very large, as I think he would be the first to admit. It would be out of order to pursue too far the general Government policy on war risks insurance, but this Bill is in some respects inextricably related to the Government policy on war risks insurance in a manner to which I wish to draw attention. I have always thought that insurance was in a certain sphere peculiarly within the province of the Government. I know the right hon. Gentleman thinks that that frame of mind is a general weakness on the part of those who sit on these benches, but if a case can be made out for any Government form of insurance by means of the spread of risk as its fundamental basis, that is peculiarly a sphere for Government operations. If that is so in respect of general insurance, it is particularly the case where war risks insurance are concerned. If this war takes a course in any way comparable with the magnitude of the armaments which exist, we shall be confronted with war damage obviously far beyond the scope of any enterprise to meet. The time may come when we shall look back on this Bill and realise, what apparently the right hon. Gentleman does not realise now, the small contribution that it is

going to make if the war takes a course which some people believe it will certainly take.
What is going to be the operation of the Bill? The companies which will be established on the recommendation of the Advisory Committee and with the permission of the Government will be entitled to make a selection of risks; they will be entitled to make their own rules for the selection of risks, and, therefore, they are certain to select only the better risks and leave to the attention of the Government the less good risks. These companies will certainly reduce the proportion of extremely dangerous risks in such places as the Port of London and in the aircraft factories, or will charge such premiums for these risks as will render the insurance of such property impossible. If the war lasts for two or three years and there is tremendous destruction, the Government will have to be prepared to bring in some war risks insurance scheme and will find that they will have an unduly high proportion of unfavourable war risks to insure. I think it is lamentable that this little, piecemeal measure has been allowed to blind a wider view of the whole problem.
There is another small point. The Bill is going to operate, not so much to prevent the establishment of new insurance companies, because, obviously, those companies which are not likely to obtain permission of the Government are not going to put forward a scheme. The Bill is for the suppression by refusal to renew permission to circularise of existing unsatisfactory companies. There is one respect in which the Government have not completed that job. These companies will have large funds in their possession without a completed range of insurance; they will not have completed their books.

Mr. Stanley: The hon. Member is under a misapprehension. He thinks that some of these societies are run on a scientific basis, with a selection of risks spread all over the country. Many of these companies do not do anything of the kind. They get subscriptions wherever they can get them. They are not as scientific as bookmakers.

Mr. Garro Jones: The right hon. Gentleman is not entirely free from misunderstanding, because some of the companies engaged in these operations are some of


the largest and most powerful in the insurance world. The Eagle Star has placarded railway stations, with obviously hurriedly drafted and hurriedly printed posters, in an endeavour to corner as much business as they can before other companies get into the field. But I am not referring to that company or to any other company. All that I am saying is that such companies, whether they are scientifically run or not, will have their operations brought to an end by the Bill, and we shall find companies with large liabilities and diminishing assets. We all know that the assets which diminish most rapidly in these companies are those which are devoted to the payment of the salaries of directors and personnel. In fact, the last dying breath of the average company is utilised in order to stop the salaries of the directors before it goes into liquidation. I think something should be done to bring these companies to a compulsory end and to secure a return of premiums in the case of any company which fails to satisfy the standards of integrity and sound financial administration required by the Advisory Committee of the Board of Trade. What is the use of allowing such companies slowly to fritter away their assets instead of returning premiums to their subscribers? That is the only practical suggestion that I want to make in regard to the Bill. My main purpose in rising was to express my regret that the Government have not taken a wider view on the whole problem.

5.52 p.m.

Mr. Spens: I want to say a word or two in support of the closing remarks of the speech of the hon. Member for North Aberdeen (Mr. Garro Jones). I do not desire to give the impression that there may not be a very good case for the Bill, but I want the House to realise what it is going to mean. Where an existing mutual association goes to the Committee and gets the consent of the Committee to the form of the circular and as to the conditions on which it is to be allowed to continue business, permission will be forthcoming, but there will be a number of cases in which permission is not going to be forthcoming, because those in authority, rightly or wrongly, will think that this is a form of business which ought not to have been permitted, although in fact it is a business started by responsible persons, is within the law and is perfectly

permissible in every way, if run honestly. If run dishonestly, the hand of the law can always reach people who are dishonest.
The Bill is going to have this effect. It is going to turn these associations, as the last speaker pointed out, into something like broody hens. They will have a certain amount of money in their coffers, but they will not be able to send out another advertisement or another circular. Whether they are going to be able to hold a meeting of their members and ask for a. renewal of their subscriptions for next year, I am not quite sure, but to all intents and purposes they are not going to get another penny in the till. That money they hold on a definite trust. Some of them may be in general terms, but they cannot part with the money they have; they have to hold it on the terms of the document governing the transaction, and will have to hold that money until the end of the war and then deal with it as the trust lays it down. It is quite true that it may be frittered away. I want the House to look at it from the point of view of persons who have contributed already to these trust funds. The whole basis is that the persons running these trusts are able to invite subscribers from different parts of the country to put in properties in different parts of the country; to spread the risks and accumulate a fund which, on the basis that only a small percentage of the property will be destroyed or damaged at the end of the war, will be sufficient to pay the subscribers who, in fact, have had their individual properties damaged. By stultifying these activities, you are cutting away the whole basis of this business, and you are not enabling them to do what I think is very desirable, that is, to return at once to the persons who have subscribed it what is in the till to-day.
As far as I know, it will be quite impossible to get a business wound up and the money returned if the Bill becomes law. In the theory of law, you are just as capable of carrying on your business with £2,000 in the till as if you had £250,000 in the till. The Bill, therefore, either goes too far in this respect or not far enough. I hope that the Advisory Committee will not administer the Bill generously. There may be matters connected with the running of some of these businesses which should be put right,


but I suggest that the proper thing is, as far as possible, to enable these societies to go on in order that those who have put their money in may get the benefit of such mutual assistance as these societies give. As far as I know, not a single representative of any one of these societies was ever asked to appear before the Weir Committee to explain how their business was carried on. I have not the slightest doubt that the Weir Committee were furnished with the full facts, but, at the same time, I think it is only right that those who put their money into these concerns, and who are responsible for them, should have had an opportunity of putting before the Committee a scheme by which these societies could be properly carried on. I hope that the administration of the Bill will not reduce them to what I have called the condition of broody hens, useless to nobody, when they might possibly be useful for carrying on the purpose for which they have been formed.

5.59 p.m.

Mr. David Adams: I do not think any hon. Member will deny the necessity for an examination, which the Bill provides, for various forms of insurance. In this case the Bill will examine the position so far as war risks of property are concerned. There is very little doubt that the average member of the working class is not liable to insure in any concern which he knows has no sound foundation. However, it is not to be asserted that because premiums are low, there is necessarily something in the nature of a fraud associated with those concerned. The whole thing depends upon the view of those associated with these societies as to what degree of damage may be done in the event of war. I take it that none of them was established subsequent to the outbreak of hostilities. Marine war-risk insurance, prior to hostilities, is quite a negligible affair. Therefore it ought not to follow that persons taking advantage of these low premiums are associated with concerns that may not give, in the process of time, adequate value for the premiums invested in them. In the case of the Government's war-risk insurance scheme for commodities, it was found that a premium of £6 per cent. was probably equitable. As the Government came to that conclusion, could they not have carried their good work further and

agreed to some form of protection against war risks for real property?

The results of the operation of this Measure may be satisfactory inasmuch as, on the one hand, they may induce the Government to engage in some form of protection for the community, and, on the other hand, they may lead to the creation of sounder, but still speculative, mutual assurance concerns with appropriate premiums incidental thereto. In either case, there will be an advantage to the community as a result of the operation of the Measure. During the last war the Government undertook marine war-risk insurance and certain forms of insurance incidental thereto. It is true that the premiums rose from £2 per cent. to as much as £6 per cent., but I would remind hon. Members that the Government's engagement in this was a highly lucrative procedure. Are the Government certain that the protection of real property against air attack is to be so indifferent that we are to have premiums so high as to be out of all reason? I think the probability is that the fears which undoubtedly the Government have at the present time—

Mr. Deputy-Speaker: The hon. Member is now arguing on lines which I previously ruled out of order as not being within the ambit of the Bill.

Mr. Adams: The point I was making was that the result of the introduction of this Measure for the closing and, to a certain extent, the destruction of certain mutual associations, may be that the Government will give further consideration, particularly in the light of our experience as the war proceeds, to the question whether it is not possible, in the general interests of the community, to engage in this form of speculation. I should like to ask whether the mutual associations could continue business through their agents. Perhaps the Parliamentary Secretary will be able to answer that question. It is a question that was put to me by a very reputable concern, which stated that it would be possible for them to continue their business without circularising and without making newspaper advertisements, merely by their agents making house-to-house calls on those who participate in these schemes. If we could have an answer to that question, certainly it would relieve the feeling that


a good deal of unnecessary damage is to be inflicted on concerns of this character, which, after all, may prove to be based upon a reasonable, though a somewhat speculative, prospect of what may ensue as far as real property is concerned. We are indebted to the Government for the introduction of this Measure, which will afford adequate protection, but arising out of it, we hope that the Government will display more courage and give the country the benefit of their experience and of the Debates on the Measure in the House.

6.6 p.m.

Sir Herbert Williams: I do not know whether it has any connection with the Government's attitude towards the whole question of insurance, but it is strange that in this Debate, for the first time in my recollection, the two clocks in the Chamber and the big clock outside, whose booms we hear, are all different. I do not know whether the Debate will be brought to an end before 11 o'clock tonight, but having regard to the very serious discrepancy which exists, I hope there may be a correction in due course.
I think it is some two or three years ago that I asked the first question that has been asked in recent times on the subject of war-risk insurance, and I do not believe that at that time a single one of these mutual societies had come into being. From what has been said in the Debate, it is evident that some of these mutual bodies are open to criticism, not on the question of principle as to whether it is possible to do this kind of insurance, but because of the way some of them are pretending to do it. Quite properly, if there are organisations of a kind that are undesirable because of their methods of business, obviously there is a case for this Bill; but let it be remembered that, to some extent, the Bill is a measure of abdication of responsibility on the part of the Government. If the Government had applied their mind to finding out, not what they could not do, but what they could do, these bodies would not have come into being.
I do not think anyone would suggest that, so far, any scheme in existence is a completely satisfactory scheme, but certainly, if I decided to join in one of them —and I imagine that I shall still be free to do so after the Bill becomes law, provided I am not invited to do so—at least

I should have possibly a better chance of getting more compensation if any of my property were damaged than I should have if I left myself in the hands of the Government, whatever the Government might be, some years hence, when the war is ended, the damage has been evaluated, and the Government have found out how much they can afford to pay. That is really the proposal of the Government—an undefined amount; whereas, in the case of these mutual bodies, they have at any rate so much in the kitty, that will be known, the amount of damage will be known at a very early stage, and the share-out will be known. There is in that some measure of security. I think there is something we might borrow from that. Therefore, I hope the Bill will not have the effect of suppressing entirely those who try to fill a gap which the Government have failed to fill. That is the issue before us. I have not the slightest doubt that the document which was quoted from the Liberal benches was not a nice document. That is the kind of circular that ought to be suppressed. On the other hand, there are organisations which have made some kind of effort to deal with the situation, and I hope my right hon. Friend will give us some assurance that the object of this Bill is not to destroy those mutual bodies which are trying to do a job honestly, even if they cannot do it with 1oo per cent. efficiency.

Mr. Stanley: I gave that assurance.

Sir H. Williams: I apologise if I missed that part of my hon. Friend's speech, but I had to leave the Chamber to see some of my constituents. Although on this Bill we cannot discuss the whole subject matter of the Weir Report, we can express an opinion that the whole purpose of that report seemed to be negative rather than positive, which was a great disappointment to many of us. There seemed to be no attempt to solve the problem, but merely an attempt to restrict the activities of some people, whether misguided or not, who have tried to solve it.
In discussing the Bill, there is one thing we must remember. I believe that the first air raid which involves serious damage will completely destroy the Government's policy in this matter, because there will come from the people who are injured an immediate demand for immediate assistance of a kind that cannot


be resisted. That is a problem which neither these societies nor the Government can solve. This is not the last Debate that we shall have on this matter, and there are some of us who may seek by Amendments to leave out some of the doubtful points in this Bill. A very important point was raised by my hon. and learned Friend the Member for Ashford (Mr. Spens). It seems possible that, under Clause 1, Sub-section 1 (ii), almost any kind of circular sent out by an existing mutual society to its members, whatever might be the subject matter of the circular, and merely because it was a circular from the society to its members, would involve a prosecution under the Bill. Therefore, I imagine that the society would be debarred from summoning a general meeting or taking the views of its members on any subject pertaining to the business. That is carrying things rather far. The provision had not struck me in that light until my hon. and learned Friend mentioned it, but having regard to his high authority as an interpreter of Statutes, I hope the Government will pay very great attention to what he said.
I think that other questions will arise with regard to mutual societies which are associated with the societies for certain general purposes affecting certain industries. I understand that my hon. Friend the Member for Stone (Sir J. Lamb), who wishes to speak later, may be able to give an example of a rather striking case. For example, if a trade association forms, in connection with its trade, a mutual association, and is debarred from drawing attention to it, a very grave situation will arise, because the person who makes the comments will not be the society, but an associated society, not even directly employed by the mutual society. I happen to be connected with an industry of very considerable magnitude. I have a close connection with a certain group of public utilities. They are perturbed about this whole question of the insurance of their properties, which are carried on not only for their benefit, but for the benefit of the public.
The hon. and gallant Member for South-East Leeds is interested in the gas industry as far as the Leeds Corporation is concerned, as he showed by certain questions the other day. Suppose that the gas undertakers of the country decide to form

a mutual association for the purpose of dealing with the problems which would arise if any of their undertakings were bombed. Is it the case that unless they get the permission of the Board of Trade, a great industry is to be debarred from making such arrangements as may be necessary to enable its members promptly to restore their buildings to a condition in which they can carry on a necessary service to the public?
It is not merely a question of a number of small mutual societies associated with farmers, property-owners and others. It is a question with a much wider implication and I want the President of the Board of Trade to realise that though this Bill will become law, it is by no means going to solve the problem. He will hear, again and again, about this problem from many hon. Members, from many different angles. Until the demand which exists is met in some satisfactory way, the agitation is bound to continue. I was agitating on this subject long before any of these societies came into being and I shall continue to agitate upon it until we secure what we consider to be a satisfactory scheme.

6.17 p.m.

Sir Joseph Lamb: I support what has been said by previous speakers who expressed doubt as to the effect of this Bill on existing organisations. I believe that when the history of this period comes to be written, one of the greatest surprises in it will be the effect on legitimate business of a great deal of the hurried legislation which is now being passed. I know that it has been necessary to do these things in a great hurry, but the effect upon legitimate business in this country has not always been clearly foreseen. Sub-section (1) of Clause 1 deals with the restriction of circulars and advertisements. It is true that permission for such advertisements can be granted by the Board of Trade, but I am not sure whether that will be adequate for the purposes which I have in mind.
My problem is this. In agriculture we have various associations, one of which is the National Farmers' Union. That is a trade union which exists for the benefit of its members and is precluded from actual trading. Consequently, although it may desire to have insurance for its members, it is not possible for the union


itself to do insurance business. The desire for mutual assurance among the members, however, was so great that an insurance society was set up, which confines its business to the members of the association but is kept separate for the purpose of complying with the articles of association. Under the Bill as I read it that society will be precluded from using as it has done in the past, the publications sent out to the members of the association, for the purpose of advertising the advantages of the mutual insurance scheme.
That is not a work which was started for the special purpose of dealing with war risks. It has been going on for a long period very successfully. It was seen, when the War Risks Bill came out, that it was absolutely impossible for agriculture in its present condition, to comply with the tremendous rates that were proposed. Consequently, this society was set up specially for agricultural purposes and a voluntary scheme has been evolved which is doing good work. My problem is whether there is anything in the Bill which will interfere with the legitimate work which the members of the association are asking that mutual insurance society to do for them. I have grave doubts about whether the Bill will not limit that work, and I hope it is the intention of the Government to accept Amendments later which will make it clear in the Bill that the work which the society has been carrying on with such benefit, can be continued. I hope that will be stated definitely in the Bill, because I do not want the matter left subject to permission being granted by any board, even the Board of Trade.

6.21 p.m.

Mr. A. V. Alexander: It has been interesting to note during this Debate the number of criticisms of the Measure which have come from the other side. I hope that when we reach the Committee stage those hon. Members who have criticised the Measure, if they still disagree with the Government, will give us the opportunity of finding ourselves, for a change, in the same Division Lobby with them.

Sir H. Williams: If you vote for our Amendments.

Mr. Alexander: It has been notable in the last few years that on a number of occasions there has been severe criticism

of the Government by hon. Members opposite, who have nevertheless always voted with the Government, but that is by the way.

Sir J. Lamb: We want to improve the Bill.

Mr. Alexander: I was only "pulling the legs" of hon. Members opposite. The position as I see it, and as was to some extent stated by the hon. Member for South Croydon (Sir H. Williams), is that, however much it may have been the intention of the Government to try to implement paragraph 14 of the Weir Report, what will happen in fact is this. Under Clause 3 anyone who wishes to continue in this war risks mutual insurance will have to apply for permission, and no doubt in some cases permission will be given. That class of business will be carried on in every one of those cases right against the terms of the Weir Report. The Weir Committee pointed out that they had examined all kinds of voluntary schemes but had come to the firm conclusion that those schemes would not work unless they were on a national basis. In fact, the measurability of the risk of war damage is such a difficult matter, that unless you had a national scheme you could not get any satisfactory fund upon which to draw.
The Bill will mean that provided the Advisory Committee carries out the terms of the right hon. Gentleman's speech, in which he said that they would be able to deal sympathetically with reasonably sound schemes, then those schemes will be able to advertise. Those concerned will be in a position to announce to the world, "Our scheme has received the approval of the Board of Trade Advisory Committee." Of course, according to the particular standards which are laid down you may be able to exercise control on such matters as the proper conditions of the fund and the expenses to be allowed in administration, and so forth. Those conditions will be approved, but, in fact, although you may intervene as regards the use of large or small type in prospectuses, you will still have large sections of the public who will believe that a scheme which has received the approval of the Advisory Committee will give them real cover against damage caused by war. I believe that to be impossible.
That, I think, is the serious criticism of the Government's policy in this matter —that it is not enough for them to come here with a Bill to implement as far as they can paragraph 14 of the Weir Report. It means as the hon. Member for South Croydon said, that directly you get any damage of a substantial character you will also get such an outcry from the community because you have not made provision against it, that you will have to deal with this matter all over again. I listened carefully to the speech of the hon. Member for Colchester (Mr. Lewis) and I see that if the Government make no provision at once of a widespread character, as satisfactory as it can be made, there must be lots of people especially in the Eastern counties who will want to try to do something themselves. But, of course, the fact that any such effort would be geographically restricted, would almost, of necessity, mean that when the damage was incurred, it would probably be impossible to provide anything like adequate funds to meet the situation.
I submit that the Government are, therefore, bound to look at the situation afresh. We have never had an opportunity for a Debate on the wider aspects of the Weir Report. That is not entirely the fault of the Government, because the Opposition has also a responsibility for submitting, through the usual channels, the subjects for Debate. But I regard with grave apprehension the possible effect of a number of mutual schemes being launched with the approval of an advisory committee as to the conditions which are contained in their advertising. No doubt the society to which the hon. Member for Stone (Sir J. Lamb) referred, has done great service to the members of that agricultural organisation in the sphere of general insurance. But directly one comes to the question of war risks one comes to something in regard to which it is not possible to measure actuarial risk in relation to premiums in the ordinary way. Then are the Government to say, "We can exempt the departmental publications of a general insurance organisation dealing with this matter"— although they are no more able than anybody else to give actuarial cover—and not to exempt anybody else? That is the real difficulty in dealing with a Bill of this nature.
I am bound to come back to the submission which I, with others, made in evidence before the Weir Committee, that there is no basis for an approach to these matters except that of a contribution of the whole of the property owners in the country to a fund, at such a rate as the Government may settle and to be continued for such a period—even after the war, if necessary—as will enable the Government, whatever the economic circumstances of the country may be, to have at least a substantial nucleus to meet the claims which will inevitably arise.

6.30 p.m.

The Parliamentary Secretary to the Board of Trade (Major Lloyd Georģe): The Debate has, to a large extent, followed a course which is outside the scope of this Bill. We have had a great deal of discussion which you, Sir, ruled out of order with regard to the whole question of property insurance. The right hon. Gentleman, however, said that by this Bill we were preventing anybody filling in the gap which is left by the Government, and my hon. Friend the Member for South Croydon (Sir H. Williams) said that at least with these schemes there was some measure of security. My right hon. Fried, in introducing the Bill, pointed out that in one case the securities were a sum of £25,000 against property of £25,000,000, a proposition not many people would jump at. The Bill is based on the recommendations of the Weir Committee, and the purpose of the Bill is not to discourage insurance where there is an element of real security. That is the answer to the points raised by hon. Members on both sides of the House.
The administration of the Bill with regard to associations of genuine mutuality will receive generous treatment. The Bill is designed to prevent the public being misled to subscribe to schemes where, as the Weir Committee points out in its report, there is complete inadequacy of the contributions for the purpose of affording any really effective cover. That is the purpose of the Bill, and while the right hon. Gentleman opposite pointed out that this Bill might not effect that purpose, at any rate we can go as far as is humanly possible to prevent people subscribing to schemes of insurance where the funds are totally inadequate and other safeguards are missing. It may be that it is impossible to make it perfect, as there


is always somebody who will get rid of his money, no matter what safeguards are put in. But at least we shall be able, while not discouraging schemes where there is real mutuality, to prevent schemes which are totally inadequate being carried through.
The hon. Member for Consett (Mr. David Adams) asked a question with regard to mutual associations, whether they would still act through their agents. The answer is, "Yes," but such an agent would come under the Bill, under Clause 1, if he left any circular. I do not, however, think it would be of much advantage to the agent unless he could leave some particulars of his association's scheme. With regard to the question put by my hon. and learned Friend the Member for Ashford (Mr. Spens) with regard to winding up, I will look into the point.

Mr. Spens: With regard to the question of winding up where they have not enough money to carry on, there are cases where under certain circumstances a company can be wound up, and I suggest that it might be desirable to have some such powers in this Bill as are contained, I think, in the Companies Act.

Major Lloyd Georģe: We will look into that matter.

Mr. Lewis: Will my hon. and gallant Friend deal with my point as to the inter-

pretation of Clause 3, Sub-section (3), as to whether in fact it will be necessary for the people insuring the property to bring each property before the notice of the Committee?

Major Lloyd Georģe: If my hon. Friend will read the Sub-section, he will see that it is dealt with.

Sir J. Lamb: May I have an assurance that the point that I raised with regard to existing societies will be considered by the hon. and gallant Gentleman?

Major Lloyd Georģe: Yes, Sir, certainly. Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Tuesday next.—[Lieut.-Colonel Kerr.]

The remaining Orders were read, and postponed.

Orders of the Day — ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Lieut.-Colonel Kerr.]

Adjourned accordingly at Twenty-five Minutes before Seven of the Clock, till Tuesday next, pursuant to the Resolution of the House this day.